An August Surprise from Obama?

August 5, 2010

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. A few key points:

1) Republican leaders believe this is going to happen since GOPers and Democratic moderates in the Senate are unwilling to spend more taxpayer money on more stimulus. But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.

2) Wall Street banks are alerting their clients privately to this possibility. Here is what some are cautiously saying publicly. This from Goldman Sachs:

GSE policies are one of a dwindling number of policy levers the administration has left to pull, so it is conceivable that changes could be made, though there is no sign that a policy change is imminent. The Treasury’s essentially unlimited ability to provide financial support to the GSEs creates an interesting situation over the next twelve months: the GSEs could potentially be used to provide additional support for the housing market and, to a lesser extent, the broader economy in 2H 2001.

And this from Mizuho Securities:

As policy makers ponder their next move the data suggests that they face not only a stalling recovery but a growing risk of deflation taking root in the economy. As a result, the Administration has turned back to industrial policies by approving the purchase of a sub-prime auto lender by GM as a means for pumping  up domestic sales, especially since the latest auto sales data indicates that consumers are still responsive to incentives. This precedent increases the risk that the government will use its control of Fannie and Freddie to increase consumer cash flow and juice the economy again.

Moreover, Morgan Stanley is pushing a mortgage relief plan directly to Congress. On August 3, a top Morgan Stanley economist recommended to the Senate Budget Committee that Fannie and Freddie ease their lending standards to allow millions of Americans to refinance their mortgages.

3) Keep in mind the political and economic context. The nascent recovery is already running out of steam. Wall Street economists just downgraded the government’s second-quarter GDP estimate of 2.4 percent to around 1.7 percent. And as even Treasury Secretary Timothy Geithner is warning, the unemployment rate may well begin to rise back toward the politically toxic 10 percent level given such sluggish growth. Many in the White House thought the unemployment rate would be dropping sharply by this point in the recovery.

But that is not happening. What is happening is that the president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.

4) And don’t think the White House is worried about financial market reaction. If they thought it would pass Congress, they would be submitting a $200 billion Stimulus  2.0  (3.0?, 4.0?) right now.

August is supposed to be a slow month for Washington politics. But maybe not this one.

258 comments

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[...] James Pethokoukis hears rumors of an August surprise coming from the White House, one that will attempt to win backs the hearts and minds of voters dismayed at the failing economic policies of the Obama administration.  With the government fully in control of Fannie Mae and Freddie Mac, Barack Obama may issue an order to forgive portions of underwater mortgages processed through the GSEs, where negative equity approaches $800 billion overall.  Some financial houses have begun quietly preparing for the possibility: Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011. [...]

I have an “underwater” car note. Can I get a government handout?

Let’s further reward irresponsible people who bought more than they could afford. Why not simply just write off all the debt in the country? Why not simply forgive everyone’s “underwater” everything?

Robbing Peter to pay Paul, yet again, to get Paul to kiss your backside.

Posted by catmman | Report as abusive

[...] pledge to give away half their fortunes to charity | Technology | guardian.co.ukThe Usual FareAn August Surprise from Obama? | James PethokoukisEconomist’s View: Tax Cuts and the Stimulus PackageFehlende Bewerber: Tausende Lehrstellen [...]

If they want to buy votes than everybody should have 20% knocked off there loan balance.

Posted by Vandetta | Report as abusive

[...] James Pethokoukis hears rumors of an August surprise coming from the White House, one that will attempt to win backs the hearts and minds of voters dismayed at the failing economic policies of the Obama administration.  With the government fully in control of Fannie Mae and Freddie Mac, Barack Obama may issue an order to forgive portions of underwater mortgages processed through the GSEs, where negative equity approaches $800 billion overall.  Some financial houses have begun quietly preparing for the possibility. [...]

[...] hot rumor comes from James Pethokoukis: essentially, the White House (which is becoming increasingly frantic about the way that their [...]

[...] and all to read the following view from James Pethokoukis which was sitting over at Reuters.com (HERE). WE’ve gone ahead and taken the liberty of creating the doc into a pdf and throwing it up at [...]

[...] James Pethokoukis reports on rumors of a massive gift to underwater mortgagees in specific markets (think: Las Vegas?) from the Obama [...]

[...] of the mortgage debt of millions of Americans who owe more than what their homes are worth. An August Surprise from Obama? | Analysis & Opinion | Become a CF Site Supporter Today and Make These Ads Go [...]

[...] has this one over at Hot Air, and I want to think through the consequences. Here’s the original rumor-mongering from James Pethokoukis: Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington [...]

[...] Pethokoukis is hearing the rumors of something which might put a number of you in the situation where you’re paying down your [...]

I have plenty of consumer debt but I haven’t been late on a single payment. I rent and pay taxes but I won’t benefit at all. Why not pay down my debt? This sure doesn’t earn my vote.

Posted by Nomasobama | Report as abusive

[...] [...]

I had predicted this or something like this .. in URL below ..

http://amareshgangal.blogspot.com/2010/0 6/14-stimulating-credibility.html

Thanks – Amaresh.

Posted by Amaresh_Gangal | Report as abusive

[...] leave a comment » The next irresponsible decision you subsidise could be your own. [...]

Solve the problem. The problem with housing is demand. Increase demand, and price increases will follow. Increase the tax deductibility of mortage payments for say the next 5 years. 2.5X for 2 years, 2X for 2 years, 1.5X for 1 year. Anyone with a house is now incentified to pay the mortage. Anyone underwater has more hope of clawing their way out. Anyone waiting to buy a home now has incentive to purchase now. Increase the demand, and price increases will follow.

Posted by Putatis | Report as abusive

This would be really, really strange. It could only apply to mortgages held by Freddie and Fannie. Anybody whose mortgage was held by a bank, a company like Annaly mortgage, or whose mortgage had been packaged and sold as an MBS would be out of luck. In that case, we would be treating two identical borrowers substantially differently.

Next, the question would arise as to where the funds to do this came from. All Federal funding has to be authorized by Congress, so did Congress allow for this when they extended the bailout to Freddie and Fannie? Did Congress now they were doing this?

If this were to happen, we would be treated to another Santelli rant.

Posted by RickCaird | Report as abusive

[...] hot rumor comes from James Pethokoukis: essentially, the White House (which is becoming increasingly frantic about the way that their [...]

And how does this help the millions with no job, no prospects, and a destroyed credit record to throw a monkey wrench into all thier personal recovery efforts???????

Posted by Aracasil | Report as abusive

[...] You can read the article for yourself  here. Possibly related posts: (automatically generated)What will happen to Fannie and Freddie? So you think Obama’s a socialist?A Very Green Christmas for Fannie and FreddieFan and Fred and the Problem of NarrativeEnergy Efficiency Loans Lose the Backing of Fannie Mae and Freddie Mac Categories: Random Thoughts Comments (0) Trackbacks (0) Leave a comment Trackback [...]

[...] Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. REST VAN HET VERHAAL [...]

[...] Пошел слух, что Обама намерен заставить банки частично простить американцам долги по закладным – тем, где стоимость дома в результате падения цен стала меньше суммы mortgage. [...]

Why don’t they do a cramdown, yet reserve the right to share in any equity accumulation for 5,7, or 10 years thereby recouping the money? Owner Occupied homes only, and if there is any mortgage fraud proven when someone acquired that loan, well, it looks like those people will have just to move into a jail… This would keep people in their homes by giving them a more affordable payment, yet not “reward” them when they sell if and when a reinflation of home values return. This added bookkeeping should be simple enough to administer.

Posted by GaryFrimann | Report as abusive

[...] From Underground: Markets awash with a rumor about an Obama August surprise By Yra There is a Reuters blog making the rounds that the Obama administration is planning a surprise for the 15 million [...]

What us folks who need jobs, but don’t own houses? What about using some of that $7B funding to Pakistan two weeks ago for stimulating US business with some incentives to hire? How about that?

Posted by cutusbudget | Report as abusive

I put 20% down on my apartment, so my loan is not underwater (yet). So if I lived in other parts of the country where they accepted 5% down I would have qualified for a government bailout. Great!! :|~

These unqualified people who got these mortgages get the bailout. In 3 more months they will still be foreclosing anyway. How about giving the hardworking people who contribute tax dollars to the economy a break for a change???????

Posted by JohnZNYC | Report as abusive

MORAL HAZARD!!!!!!

Enough of the bailouts; this is insanity.

Posted by iflyjetzzz | Report as abusive

Hellooooo….can you saw moral hazzard? It no longer pays to do the right thing!

Posted by IsItJustMe | Report as abusive

He likes to talk about standing up for the little guy. Making sure those crooks on wall street don’t get off with out paying the price. He should start with the guy in the mirror. I’ve worked hard to pay down my mortgage ahead of schedule so it isn’t underwater so that I reduce the risk of catastrophe, I’ve paid off my consumer credit as well. In other words I have done the responsible thing to look out for my family. What will I get in return, higher taxes for me now, much higher taxes for my kids in the future and what feels like a swift kick in the but!

Posted by JMC1234 | Report as abusive

Rewarding retards.

Posted by FloydDaBarber | Report as abusive

Well, this is a whole lot easier and faster acting than the tedious task of creating more jobs. Very unimaginative but effective as it’ll cement the votes of those who fit the stereotypical Democrat voter. All this proves is, the Dems are running scared and have no real solutions for the problems that face solid citizens.

Posted by GLK | Report as abusive

Equal Justice Under the Law !!!

Those of us who own our own homes would be required a 20% rebate too !!!! Fair is Fair! I would never have paid off my mortgage if I knew this was coming.

…or maybe it is time to start confiscating our property and redistributing it based on political registration roles?

Posted by KarlQuick | Report as abusive

Why is this limited to just those underwater? If they TRULY were concerned about FAIRNESS and helping ALL American homeowners, they would just forgive 20% of ALL homes they control. However, this is such a boondoggle anyway, because it just means MORE losses for Fannie and Freddy which means the Taxpayer pays it back in the future, which means they are just transferring a Freddie/Fanny homeowner’s 20% to ALL taxpayers. These people couldn’t run a lemonade stand!

Posted by boBNunny | Report as abusive

We were responsible and never took on either an unaffordable mortgage nor used the increasing equity in our home as a piggy bank to be accessed by ever-increasing-in-size mortgage refinancings to pay for expensive late-model cars and exotic vacations. Such prudence prevented us from being in danger of being “underwater” although we missed out on the exotic vacations, the trips to Disney World & still don’t have any fancy late-model status cars parked in our garage. Too bad I am unable to live irresponsibly and look to everyone else to bail me out. Must have been the way I was raised …

Posted by Sevan | Report as abusive

More money to the losers who made stupid choices, leaving those of us who didn’t overpay for our homes stuck with the paying the bill.

Posted by TomGenin | Report as abusive

Qualifiers would stipulate that you are registered to vote for the Democrat party.

Posted by sailordude | Report as abusive

I am not underwater but my loan is held by Freddie. I want 20% off too!!! Talk about discrimination

Posted by Tiredofit2 | Report as abusive

This is exactly why the gov should not have this kind of control. This is the worst kind of vote buy… any decent vote-buying politician would use their own money to buy a man’s vote… not that man’s own money.

Posted by wiserstill | Report as abusive

The only reason this administration continues to throw good money after bad is to buy votes for the up coming elections. The DemocRATS are running scared and they see this as a way to stay in power. I am a 68 year old disabled retiree, but because I have managed my money well through out my life and have paid my bills I can not qualify for this freeby. I for one am tired of paying the way for these thug politicos and those who are living large on my dime. Enough is efreaking nuf. Stop trying to spend the government out of debt. It ain’t working.

Posted by locostoko | Report as abusive

I don’t know what to think about this; Reading the article makes me feel like I did after watching Inception – After that movie I was asking myself: Do I like it? Why do I like it? Do I not like it? Why don’t I like it?

A part of me feels like, it’s good that a huge percentage of American homes (rather than big Wall Street financial institutions) will get some real relief from all this stimulus, taking the stress off their families and, possibly, allowing them to have a more peaceful life (I hate the idea that we’ve spent so much money in the Middle East fighting a war that seems like it’ll never end) – good to bring taxpayer money back to the taxpayers who live in this country.

At the same time, I think that the stress caused by poor decisions is, in the long run, beneficial for the person and the future. Decisions are more carefully thought out – maybe we don’t buy that thing we really can’t afford next time because we know where it led us the last time. With papa-government stepping in like the proverbial “soft dad”, the kids get spoiled and ultimately become less useful in society.

I guess the bottom-line is that I’ll keep doing what I know is right, trying to make the right decisions, not careless ones. In the long run the only one I’ll be responsible for is myself. In the end, no matter how peachy or painful things seem today, we all get what we deserve.

Posted by eugenewilliams | Report as abusive

Understand that this is smart and needed and will finally allow the economy to move forward. Obama is not doing anything more than recognizing the loss of value that exists. Fannie and Fredie have the exposure on their balance sheets already, all this would do is allow recognition from an accounting standpoint. No new dollars go in it is a recognition of what exists issue not a pay new dollars issue. This is the other shoe waiting to drop. By having Fannie and Freddie do this first, it softens the shock to the system. This will allow people and businesses to move forward into the new world. If you dont benefit directly, c’est la vie, life is not fair; but lets not be colossally stupid to be what you call fair. This is a good thing

Posted by BostonBanker | Report as abusive

Unfortunately I was responsible and bought only what I could affford and paid ahead every month, so I owe very little.

So I get nothing.

Maybe I’ll run out and buy a really nice big house and wait for the government to reduce the principle so that I can afford it. That should save the economy, right?

Posted by StanM | Report as abusive

I wonder if we who pay out bills and are not underwater with our homes, those of us out there that did not buy a home we can not afford.
That we bring a class action law suite against president Obama, for discrimination. If you look at it in the simple point we are being discriminated, between whom pays there bills and who dose not. It would be an unfair for them to enact it.

Posted by Mr.Ed | Report as abusive

THIS will never be a functional plan nor will it have the slightest impact. This announcement will not be supported by an actual functioning plan. 12 months from Nov. an article will be published about the failure of the plan as only 3% of the estimated 10′s of thousands will have benefited from the program.

the loan modification is the best example.

THIS is ONLY for the election and NOT for you, MR Joe Lunch-Bucket

DONT BE FOOLED AGAIN” The Who!

Posted by Florida | Report as abusive

What’s the problem? Hugo Chavez would be proud of this wonderful blessing from the Socialist Democracy of the United States…aka GOD (Government-Obama-Democrats)

Posted by Phocus | Report as abusive

Moreover, this is Taxation without representation. If the President can circumvent congress and order Fannie & Freddie to forgive debt to a select group, while putting the burden of that debt on all remaining taxpayers, what’s the difference between Obama and King George?

And then there will be no differnce in the outcome.

Posted by TomGenin | Report as abusive

This president is a total incompetent. He should be rewarding hard working people not the people that are going to destroy the mortgage market for the second time. This country is upside down. People that take are rewared and hard workers are pusnished. What a bunch of fools in this administration

Posted by bkalb | Report as abusive

This government is becoming more absurd by the second. This undocumented worker, part time president and affirmative action, community organizing, communist thinks he can just spend us into submission and buy his support with our money… I think not.
Barney Frank and crew got us into this mortgage debacle mess and now they want to waste more money trying to get us out of it?? no, no, no…
Stop Spending and let the chips fall were they may.
It would be better if everyone just stopped working for a month or two and crippled the tax revenue that these inexperienced mooks keep wasting.

Posted by HarryO123 | Report as abusive

I’m tired of being a responsible, law-abiding, decent citizen. I am going to renounce all my responsibilities, change my name to a non-Caucasian one, and then, maybe then will I get what I am entitled to and deserve. Clearly hard-work and playing by the rules only gets you bent over a barrel in this soon-to-be debt-ridden third world country.

Posted by BlondOverBlue | Report as abusive

This administration will not give the hard working people a break becasue they can think for themselves. They want the vote of the takers becaue they vote by how much they can get from the government, not what is best for the country.

Posted by bkalb | Report as abusive

When does the second American Revolution begin?

Posted by fowlersammy | Report as abusive

Wait – Let me get this straight. 1 in 5 mortgages are underwater. So Dems are trying to buy votes from the 1 while leaving the other 4 stark mad because they’ve just rewarded the 1 irresponsible and given nothing to the 4. I dont see how this can be a vote booster. If I were them I’d concentrate on making the 4 happy.

Socialistic mentality will never work. It hasn’t worked yet and we’re not the exception.

Posted by Litsz02 | Report as abusive

What they are doing is just plain wrong. The last time I checked, 40% of the people who had their loans reworked were still foreclosed on.

What drove the housing prices up was the DEMAND for homes by PEOPLE WHO COULDN’T AFFORD THEM because of EASY CREDIT. Nothing the US government can do will fix that.

It’s time to let the markets work. Let the banks foreclose, let the market settle down. People like myself who bought a home and not an investment will eventually see our values rise and our mortgages drop. I may not be able to move for another 10 years, but I have no plans to anyway.

Stop giving MY money away. If you don’t want to use it to build a new road or fund NASA or fight a war, give it back. It sickens me to see it redistributed without getting anything back for it.

Posted by FredIsDead | Report as abusive

obviously, it a desperation effort to reverse some of the damage done by this admin that will come home to roost in Nov 2010 and 2012

Give the proletariat a bone, and they will vote for you.

Unfortunately, the character of many Americans (who got themselves in this fix to begin with) suggests that this might actually work.

“Beware of Greeks bearing gifts” (no offense to Greeks, of course)

Posted by DrBobNM | Report as abusive

He could knock 90 percent off my mortgage payments and I STILL would not vote for him. It is not his or Congress’ job to meddle in private contractual affairs, publicity of which is up to the contractees and NOT the government.

We are STILL, Constitutionally, NOT a fascist nation. It is time to return to republican federalism and rid our nation of all those who want otherwise. Let them go to nations that want socialism, fascism, onanism… etc. Leave those of us who cherish our Founders’ gift to live its promises without interference from Satanic ashmoles.

Posted by JimInMT | Report as abusive

Well played politically Obama. Lets face it there just a couple of swing states that really matter. You’ve already bought the Ohio votes by throwing our money to the Auto industry. Now you’ll swing Florida back into your favor by giving them money for their irresponsible home buying.

From those of us who took out a responsible mortgage that we could afford, F-You.

Posted by tmteague | Report as abusive

No August surprise will stop the juggernaut that is now headed toward the Dems and limp-wristed Repubs this November. Health care and the economy are the issues.

Posted by roddypiper69 | Report as abusive

When I was in college around 1990, my economics professor told theclass that our Republic was collapsing and he explained why. He said that politicians knew they could buy votes and as long as they coudl buy a few more votes with handouts than they lost through the taxes needed to pay for them, they would win. This article states clearly the administration is thinking exactly along those lines. They will keep looting until there is nothing left to steal.

On a related note, I’ve been paying my mortgage faithfully for years. Another couple of years and it will be paid off. If they government really wanted to help out they would give money to the millions like me so we could clear our mortgages and instead spend that money elsewhere in the economy. That won’t happen though because those politicians know few of us would vote for them anyway. So instead they bail out the ones who did wrong but WILL vote correctly.

Posted by Thane36425 | Report as abusive

Over the years I have owned several homes in different states. I alway had to pay minimum of 10%, but most of the time I was required to put 20% on the table. after a very in depth credit check I purchased a home. However, I always purchased what I could I could pay for not what I was qualified to buy. I knew how much I could afford to pay each month. Why are those of us who cherish our good credit being robbed (taxes) to support the irresponsible, non bill paying folks in the country? as the old saying goes “Work hard and dilegently and ye shall be rewarded” NOT…

Posted by locostoko | Report as abusive

You can only borrow money from those who have and give it to those who don’t for so long. At some point, people need to say enough is enough! Cut Spending, Cut entitlements. Provide incentives to encourage consumption and hiring by cutting employment taxes or increasing the deductions for home ownership. Apply $200B to either or both of those and watch the response from American Public. Vote this knucklehead out in 2012 and flush the rest out as the opportunity arises. It’s the only way we’re going to have a chance at saving this once great nation.

BTW…What’s up with the auto-posted comments? Are liberal bloggers trying that desperately to clog up the comment boards in order to keep people from speaking their mind?

Posted by StopWhiningPlz | Report as abusive

In many cases Main Street has many underwater home loans and has held these properties so their credit scores don’t fall off a cliff. Since the housing market has no real hope of a recovery until jobs return it would be a great waste of taxpayers’ money to help out a few who have Fannie Mae/ Freddie loans they can’t pay anyways and leave the rest of the underwater homeowners who mortgage with private banks left holding the short end of the stick. This is discrimination at its core. If you really want to bail out main street they would need to spread the bailout all homeowners regardless of the origination on a case by case basis.

Posted by 1964go | Report as abusive

Ummm…okay…silly question here…

If I bought a home for $250,000 5 years ago and my outstanding principle is now at $230,000 but the new appraised value is $180,000 – even though I can still make the payments with no problem – isn’t that my risk to bear? So the government now wants to give me a new loan for $180,000 and forgive the $50,000. Now I have a lower payment. Cool. However, what happens, say, 10 years down the road when everything has turned around and my house is now valued at $250,000 and I have a principle balance of $150,000 and I sell it. So, I get $100,000 from the house. But, haven’t I received $50,000 unjustly since it was written off by the government and the lender? Good deal for me – bad deal for the American taxpayer. Isn’t this called unjust enrichment and therefore illegal?

Posted by TheBoBo | Report as abusive

More money down the proverbial rat hole, better used to build and grow businesses and…JOBS

Posted by zrjh26 | Report as abusive

Wasn’t the plan in one of the “stimulous” plans that if lets say:
Mortgage is 800,000
Value of home is 600,000
New Mortgage is 600,000

But if you sell home for 800,000, the bank gets the missing $200,000?

Posted by Yogi_bears_tie | Report as abusive

So I bought a house that cost twice my annual earnings and paid 30% down because that’s the way I was taught to run my business. Now this Marxist pig is going to use my tax dollars to subsidize people that lied on their loan applications and bought houses that cost ten times there annual earnings! Time for torches and pitch forks.

Posted by Wanderer0101 | Report as abusive

We used to call someone who put 25% down on a home purchase “responsible”, now we’ll call them “sucker!”

Posted by u143104 | Report as abusive

Government of the deadbeats, by the deadbeats, for the deadbeats

Posted by CambridgeErich | Report as abusive

During the roaring 90′s my wife and I didn’t take vacations or eat out often so we could pay off our mortgage. We “sacrificed” because we didn’t want to owe anyone anything. Seemed like a prudent decision. Now the gubment is gonna reward people for making risky financial decisions? Up is down and down is up.

Posted by Smokin_m1 | Report as abusive

As usual, because I work hard, pay my bills on time and have a mortgage through a small bank I won’t qualify for any of this stuff.

Posted by theshow72 | Report as abusive

I think I just made my last student loan payment.

Posted by chrislitt | Report as abusive

Why don’t they just let people borrow money from the government at the bank rate? Why should I pay a bank 6% interest on my home loan when the bank gets the loan from the government for 0.25%? I should be able to pay the 0.25% directly to the government and cut out the money grubbing banks.

Posted by oppo | Report as abusive

If you’re going to play that game then the only fair way to do it is to write a check to every man, woman and child.

Posted by ShaneMc67 | Report as abusive

So all of the families like mine who didn’t
go out to eat twice a week
go on expensive vacations
buy ipods and iphones
buy rims and jewelry

so they could pay their mortgage are going to get NOTHING

We are finished as a nation

Posted by obfan | Report as abusive

Just before the election, eh? Those Washington guys are soooo corrupt! Sounds like he is trying to bribe us for our votes, just like he bought the votes of some Congressmen. Don’t fall for it.

Posted by JohnWGramm3rd | Report as abusive

Let me understand this.

The goverment passed laws so that people can buy houses with a income check.

So people bought houses without the income to keep the house.

Now the goverment want to give these people a goverment handout so they can keep thier houses.

Now when I bought a house, they allowed a mortgage up 2.5 of income. But I bought a house that equal my yearly income. I bought cars that got excellent gas milage. I added extra insulation to my new home back in 1980 to reduce my heating cost.

Basically throughout my life I live within my means.

I object to these goverment bailouts to people you bought more house, more cars than they could afford.

Posted by DanM53 | Report as abusive

So let’s see if I get this right-some columnist from some alsoran website says he hears a rumor from the WallStreetBoys that the Obama administration is going to “order” Fannie And Freddie to forgive a part some homeowners upside down mortgages (which happen to be just as much if not more the lenders fault than the homeowner because they relied on the lender to be truthful about what they could afford) and all of you vultures want to start screaming at the Obama administration? They haven’t done it, they haven’t said they’re going to do it, they haven’t given ANY indication they’re going to do it, but you’re going to scream about. How about the rumor that if the Republi-CONS get control of Congress they’re going to pass a law requiring everyone to own a gun and go the Baptist church. Makes about as much sense.

Posted by cranky_yankee | Report as abusive

Here we go again….destroying banks…home values and giving the American dream up to the lazy..entitled..Godless..illegal…for the tax payer to pick up the tab. Impeach Obama and his band of thieves.

Posted by welovetheUSA | Report as abusive

Here we go again. THIS IS “OUR” MONEY. And they want to bail out people who falsified their loans information to buy homes…..AFTER they used OUR money to bail out the banks for the same reason. OUTFREAKIN’RAGEOUS……… What will it take to recover! Give us back our tax money…we’ll spend it..Cut out a few hundred military bases that do NOTHING. Cut out GIMMIE GIMMIE welfare programs…………. problem solved!

Posted by treeburner | Report as abusive

Absolutely INSANE! Rewarding irresponsibility and punishing responsibility. This administration is _proactively_ trying to de-construct our society.

Posted by Pyotr | Report as abusive

Every day – the election of Barack Obama becomes a bigger and bigger nightmare. The hardworking, serious citizens of this country have been deemed worthless by this Administration – except for the tax revenue they can provide. The Dems under Obama have decided they want to rule yes RULE totally depended individuals – talk about slavery – that is their voter base – and Obama will continue to marginalize any clear thinking achiever – that does not want hand outs, or government control of their lives. Those of you that voted for Obama should have done more reading, more analyzing of his associations and his agenda – and not given your precious right to vote to this person intent on “fundamentally changing” this once great country. How about everyone paying the tax bill in this country decide their salaries are underwater and want to with-hold 20% from their tax payments.

Posted by RedTruck | Report as abusive

It’s unfortunate that those of us who only bought a house we could afford will be bailing out (with our tax dollars) those who did not. Just one more wealth distribution tactic by the Obama administration…

Posted by 35clara | Report as abusive

Just who in the hell do these crooks think they are? The sob’s are giving away the farm to welfare AGAIN. This is outrageous. To all you non-voters from the last election, get off your collective butts and vote the b-astards out of office. We need to cut all taxes and have people make livings again. Not live in projects and use USDA food stamps to survive. Africa does not live like this, at least they kill or eat their victims.

As a poll watcher last time I saw the blind crippled crazy come out to vote for what is being called by the BO, mongrels. Well you people better get going or the farm will be gone and we will all be living in projects (formerly known as row houses). Yes, I am pis sed.

Posted by TheChuckster | Report as abusive

How did this county and common sense become non-existent. There are consequences for every action and this administration doesn’t have a clue what they have done and are doing to this country. When those on the take outnumber those of us who pay, life is over for all of us. I hope this stimulus doesn’t come to pass….

Posted by dougthebanker | Report as abusive

Just before an election, eh? It looks like he is trying to bribe us for our votes, just like some Congressmen were bribed. Don’t fall for it.

Posted by JohnWGramm3rd | Report as abusive

BO is not a King he is a mongrel and these are his own words. We need to rise up against the King again and for all the same reasons, they are taxing us to death, while they lie cheat and steal everything that is not nailed down. We have let race baiting work and we cannot even call a spade a spade anymore. Yes, the ‘of african decent’ gangstas are now acting like our while ganstas in washington, we taught them how to do it.

Posted by TheChuckster | Report as abusive

And the Socialist Regime continues to bankrupt this great country. That is one of the major tasks on this agenda.———-Why do you think F&F was not mentioned in the newly passed Bank bill? The libs and the non citizen do not want F&F to be regulated and to only take orders from them.
I tried to get an obamarefi, but because I make timely payments, I did not qualify—-
I hope the GOP screams from the roof tops over this.
One quick question—–why did the non citizen spend his birthday without his family???

Posted by BillyBob114 | Report as abusive

Quit messing with the banks and housing market. Let them fall to the the level they want. We are doing the same thing Japan did 20 years ago.

Spend the money to create jobs. When people are working they will pay their bills.

Aimlow Joe was here.
http://www.aimlow.com

Posted by aimlowjoe | Report as abusive

You want the economy to explode? CUT THE FEDERAL BUDGET 70%, CUT ALL TAX RATES 50%, CUT CORPORATE TAXES TO 0%, AND CAP GAINS TO 0%.

Then sit back and watch companies move here from overseas, watch people spend, watch businesses explode.

And it cost the taxpayers: $0

Posted by shannon1776 | Report as abusive

This

“Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth”

made me ROFLOL!!

A Federal Court would issue an injunction against any such thing about 3.867 seconds after the Judge finished reading the Complaint filed by the lenders.

That would be an unconstitutional taking of property without due process. The property would be the lender’s right to receive the money it is owed and the right to sue to collect such money (ie: us legal types call the contract to pay back the money an ‘intangible personal property’ and the right to sue to collect a transferable piece of intangible property – such as ownership of a debt which can be transferred – is called a ‘chose in action.’) Government can not take anyone’s property (personal or real) without going through due process aka the courts and in nearly all cases (except criminal forfeiture) paying compensation.

Thanks for a really good laugh! One can never ever underestimate the stupidity and gullibilty of the American public – and apparently the media and quasi-media bloggers.

Posted by inthelake | Report as abusive

We used to refer to someone who put 25% down on a home purchase as “responsible”, now we’ll call that person a “sucker!”.

Posted by u143104 | Report as abusive

What a bunch of CRAP!!!

People refinanced their homes to get cash out, spent it, got in over their heads on house payments, and WE have to bail THEM out????

God this pisses me off more than I can express in words.

Posted by IAmWinstonSmith | Report as abusive

I would qualify, but I DON’T WANT YOUR MONEY. Communism isn’t worth it.

Obama is out of control, and if he thinks he can steal from YOU to buy MY vote he’s smoking crack. (Again.)

Posted by MQBitsko | Report as abusive

Who is John Galt?

Posted by gaoptimize | Report as abusive

This is good news. There are millions of responsible homeowners paying their fully documented fixed rate mortgages on time who have underwater home values. Logic says that more people will start to walk away from their mortgages if there is no chance of ever recouping their investment.

The global economy was nearly ruined by investment banking and securities firms. The system was unregulated and rigged in favor of their huge profits. They have since been bailed out. Responsible homeowners who have not defaulted are still suffering.

This sounds like a good way to level the playing field and put a huge amount of consumer dollars back into the economy. Is it a ploy to get votes? Probably, but that’s the reality of our political system.

Posted by johnnyjr | Report as abusive

…. “that Fannie and Freddie ease their lending standards to allow millions of Americans to refinance their mortgages.”

Who really benefits from refinancing? That’s right BANKS. I work for BofA in loan processing and to see the crap that comes through for refinances is sickening. How about charging 5 points (5%) on a 100K refinance loan? The borrower will never see that money again — all for a loan that is 3/8% better than their original one. And the 5 points don’t include all the other costs like appraisal fees, doc fees, etc. etc.

WAKE UP AMERICA. When it looks like the government is trying to do something for you, look behind the curtain. With health care you found the big pharma companies, with this “mortgage bailout” it’s the big banks.

Posted by mohammered | Report as abusive

This is all about FRAUD and gimmie gimmie programs to buy votes for Libtard Scumacrats. They could care less what us tax payers want. They’re scum. Vote EVERY ONE OF THEM OUT.

Posted by treeburner | Report as abusive

How is this going to help all of the people still searching for a job? No job, no money to make house payments. I think mortgage payments should be frozen for at least 6 months. People in California, Arizona, and other places have been hit hard with regard to jobs and foreclosures.

Posted by yiayia | Report as abusive

Out-of-the-Box Solution for Underwater Houses
Simply put, several “underwater” homes and foreclosures mean houses are overpriced. To reduce foreclosures substantially, the Federal Government should require: 1) mortgage holders to share equity in these houses with homeowners in exchange for federally backed new financing; and, 2) the equity amount to be set as the underwater amount, be split equally between lender and homeowner, and become a secondary property lien paid-off only when the house is sold or refinanced “conventionally.” This approach is faster than waiting for market forces to play out.

Mortgage lenders and banks helped create the housing crisis by approving risky home loans (e.g., stated income programs) and bundling mortgages that were sold in packages as highly-rated securities. Borrowers took-on too much debt. Equity-sharing lets homeowners and lenders share responsibility for the crisis and future risks. For example, under a 40% equity-stake program, a house with a $500,000 loan balance that’s $150,000 underwater would qualify for a $300,000 new loan. The lender and homeowner would negotiate the $200,000 equity split. And local property taxes should be adjusted downward too.

Posted by LJPipes | Report as abusive

Let’s look at “underwater” mortgages from the perspective that their mortgage, when paid in full, will be EQUAL to nothing more than a higher interest rate. That’s not so bad, considering where the rates are now. Get over it, keep the mortgage and stay put.

Some sensible plan to help people keep their mortgages through rough spots may be a better solution. Banks can’t continue to own more and more empty decaying properties.

Posted by Trouvera | Report as abusive

Can I refinance my house for more than it is worth before Obama makes this happen, and I can then, my mortgage will go away as well. Well FUCK, might as well.

Posted by magicboop | Report as abusive

This is a scam if ever there were a million bernie Madoff’s…Another slap in the face for all responsible people in this world.
These will not produce one Job & how many kids to have to handover for the relief money ??? What about all the poor souls that had to give up homes in the last 2 years who because of Job loss had to leave those homes penniless…..All this is doing to make new Mortgages even harder to get….Remember if you have been unemployed in the last 3 years for even one month you still can’t qualify for a mortgage now even if you have 25% to put down….FACT… This is a Bogus cure all for irresponsibility….Damn this Man this is sooo Unamerican.

Posted by stonehillady | Report as abusive

What about something for hard working intellegent who didn’t get themselves upside down by over purchasing on their home. The one’s that were smart enough to not let the realtor and lendor sell them something they couldn’t afford. We are not going to give up our house but plan on making good on the deals we put ourselves in. That is the honest and respectable thing to do. Shouldn’t we get some relief.
Maybe, just maybe this racist president and his liberal regime could do something for the hard working honest white man. Not very likely.

Posted by arroyotoad | Report as abusive

EXCUSE ME, IT HAS BEEN 8 MONTHS AND WE’RE STILL AWAITING A TAX CREDIT (FROM THE IRS) FOR OUR HOME PURCHASED in 2009!

The brainless and incompetent bureaucrats at IRS keep delaying/asking us to ‘send additional documentation’.

We did not overspend; we put 40% down on the house and still haven’t received a ‘home buyer credit’ from IRS.

The IRS issued check$ to hundreds of prison inmates (how did they even ‘qualify’ their paperwork?). Yet, IRS is holding back funds from those who actually bought a home.

This is misrepresentation by Congress, the IRS, and the banks.

Obama is a FRAUD.

Posted by TheChairman | Report as abusive

My guess is this will be a bailout for ACORN Cul-de-sac instead of Main Street. The beneficiaries in many cases will be people who got their mortgages fraudulently ( illegal immmigrants, lied about their income, or both), could never pay the bills, and now by executive order Obama will give them freebies at taxpayer expense.

Oboama said his kind of “chnnge” won’t come from Congress and the courts, but rather by “administrative” actions. That is what we call “Presidential Decrees” when we refer to actions of third world dictators.

Without bothering to pass a law in the Democratic Congress, Obama evidently plans to personally make us taxpayers pay for his generosity to ACORN homeowners.

Folks, you voted for Obama, and we’re all stuck with him. Since he has also given us the ACORN Census, he will likely get elect4d by moving congressional seats back into blue state big city ghettos and fixing the electoral college for himself in 2012. Just a surmise.

Posted by RPhillips111 | Report as abusive

Wow, is this really what happened to our free country? The people dont like this administration, so to prevent from being voted out they are going to bribe the people with some “free money”. That’s wonderful. Congress and the people are truely irrelevant. We need a revolution.

Posted by surfnrg | Report as abusive

Nice strategy. Let me buy the votes from some, so I can continue with policies that constrain freedoms, increase government control, and increase taxes for most.

Cynical politics/policy at its’ worst, and also a sign of desperation to continue his “vision” for “change” in America.

Posted by Dump_Congress | Report as abusive

I’ve been diligently trying to pay off my house for the last 8 years. I am SUCH A SUCKER!

Posted by StGhurka | Report as abusive

Do you pay your bills on time? Yes, great, now you can pay for those that live above there means.

Nothing like rewarding those that dont take care of themselves and punishing those that do, but that is what the govenment is for after all (It says so right in the US Constitution, forget where though, im sure a Federal Judge in California can point it out)

Posted by Strangebrew | Report as abusive

This is crap. I feel sorry for folks who bought a house when the prices were higher, but that’s life. They signed a contract. I’d have no problem with a restructuring that involved lower interest payments, or a longer term, to make the economic downturn a little more palatable for them on a month-to-month basis, but now the government is going to re-write the sale price to better reflect the value of the house to a specific group? I don’t think so. If Obama is this desperate, he might just as well pick any aggrieved group and send them a nice, fat check, if he thinks it’ll make them vote Democrat in November. And if he does it, I think the blowback will be so severe that the Dems will do even worse. Why should my taxes pay for someone who either bought high, bough too much, or had no business buying at all?

Posted by Snake_Plissken | Report as abusive

Main Street will not get the bailout — Baltic Avenue will.

Posted by derekcrane | Report as abusive

What is the point of working and paying my bills anymore? It clearly makes more sense to get fired from my job and go on never-ending unemployment, and selfishly spend all the money I have saved on stuff I don’t really need so that all the still-working fools can pay my bills. America has truly become a socialist disaster.

Posted by JMcCarthey | Report as abusive

In order to pay down debt I had to raid my 401K, prior to turning 59 and a half. Both the Fed and State took 20 percent in penalty’s. Can I get the 20% back? I will promise to use it to buy stuff? US stuff.

Or how about limiting credit card interest rates to a maximum of 5%. That would help a bunch.

Thank you Mr. President

Posted by drmorocco | Report as abusive

Is Obama NUTS!! The government has NO money. The country is broke. Unemployment is through the roof. The national debt is unpayable, and for the first time in our history could default. California, the 8th largest economy in the world is bankrupt and could bring down the weakened national economy all by itself.

Forgiving a portion of someones mortgage debt has NOTHING to do with those people being able to repay ANY of the balance. And BTW, what about the rest of us which have worked hard to buy what we could afford, and have made our payments. Would the government now explain to us why OUR TAX MONEY is being used to bailout the deadbeats and losers??

Let the housing marketplace come to a natural equilibrium. No more money for the Wall Street financial cowboys who are already paying themselves millions in bonuses. No more free homes for anyone. No more national debt. No more free loaders. No more Obama type lawyer-politicians. Enough is enough.

Posted by losttourist | Report as abusive

As a responsible person who saved money and put 40% down I’m screwed. I’m upside down but dealing with it. No bail-out for me but once again our tax money is going to be used to reward the irresponsible. Multi-million dollar corporations have received most of it and of course consumers are considered last. My work hours have been cut but no big deal. I still have some income to confiscate.

Posted by MAC59 | Report as abusive

“But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.”

What “sidestepping” Congress SHOULD be showing voters is that we have a President who disregards the function of Congress. This is the beginnings of a dictatorship. Americans need to be very concerned about the dismantling of our 3-legged stool. When judges make law and presidents hand out the people’s money at their own pleasure, we no longer have the constitutional government we started out with.

The economy is weakening precisely because of the president’s policies. If he really wants to do something about it, then he should revert to the economic principles that actually work, i.e. cut spending and lower taxes.

Posted by SpeaknUp | Report as abusive

Stop the bleeding now. Get the government out of the mortgage guarantee business. Those risks belong in the private sector where rational thought prevails. Kill this idea now. Forcing another 800 billion on the taxpayers dime is 800 billion in Freedom lost.

Posted by chukalukabus | Report as abusive

And what about those who have worked the last 35 years and paid off their mortgage? Those who did not over extend their budget, stayed prepared for downturns in the economy and employment? I do not want to have to pay for those that have chosen not to.
Just someone try to buy the vote.

Posted by UgottaB | Report as abusive

I believe a better paln would be not to forgive principle but rather allow a current homeowner of more than 3 years to rewrite the exiting mortgage at today’s interest rates. Most Americans do not want a handout, they would just like to refinance but cannot because of the drop in thier homes value. Even a goverment program of 30 year loans at 5.5 % would help most people.

Posted by penoftruth | Report as abusive

So if you went and bought a house you could not afford in the first place the government will bail you out? What if the real estate prices come back up will those same people have to payback the bailout with interest? A report by the CBO and GOA showed the last bailout had an impact to 8% of the people who needed it. What about people who own cars that are not worth what they paid? And land? and stocks bought that fell in value? and other bad investments? Where do you stop? Or maybe this is another vote buying scheme from the administration.

Posted by iceman3232 | Report as abusive

Too much focus on folks that shouldn’t have bought a home, as well as unqualified under normal circumstances. The fact is, there were not near as many of those folks as there were the ones keeping up with Jones’. What everyone seems to be missing is the fact that what caused the worst of this problem is that income rose 2% while housing was 80%. Ask any economics guru and they will tell you that is not the norm, and the bubble happened for that reason alone! The toxic assets and people that shouldn’t have qualified were the weakest links in the chain, so naturally they were the first to go. If you think it’s over, wait until you see what happens in the next 12-18 months. Good points Rick.

Posted by sb0623 | Report as abusive

So I worked my but off. I made a decent amount of money and paid a large amount of taxes. I worked nights, weekend, 30 days straigt and worked 70 and 80 hour weeks. I saved and saved until I had a substantial down payment and used to to buy a home 3 years ago. I put down 40%. So now the idiots that bought a home with no money or 5% down are shocked that the price of realestate fluctuates (suprise it is called an economy) and now owe more than it is worth. Let us reward their stupidity!!!!!! and the poor sap that worked to get ahead and did the prudent smart thing and didn’t buy a home before they could afford it. Screw them. Their money goes to pay for the idiots.

That is what is wrong here. Reward the idiots and punish the hard working smart individuals. It is the Democratic liberal way

Posted by poppy1 | Report as abusive

But wait – what about Federal, State, and local income taxes on the buy-down? Is it income? Will the participants get hit with a massive tax bill when the property transfers? Can I opt-out?

Posted by snipelee | Report as abusive

I have an opposite problem. The HUD tightened lending rules on condos. I own a condo, I’ve had buyers willing to put down 20% and 30% and they can’t get a mortgage!

The new lending rules instituted by the HUD unfairly target condominium projects. The rules that disqualify me are due to 50% owner occupancy in my building and one owner owns a majority of our building.

My building is in great shape and financially sound, but I can’t sell????

Posted by nonwarrant | Report as abusive

This is mostly a transfer of taxpayer monies to people who don’t have the moxy to plan for making payments and the upkeep of property. They were unqualified before they received the first mortgage loan and as usual the government will make it worse by throwing more monies at the problem.

Posted by RickOShea | Report as abusive

When will people realize that it isNOT a government bailout; it is using money from taxpayers to bailout people who have made bad choices. As we know now, a really bad choice would have been if McCain had been elected. We would be in the same position except seduced to it. With have BHO elected, we see the true beliefs of the administration, dem controlled congress and the left wing of the country, who believe it is just hunky-dory to run this country into the debt-ridden dirt. We pinch pennies while the administration, congress, dem controlled states spend like drunken dems.

Posted by BeanerECMO | Report as abusive

Chairman Maobama prints our money which increases our countries debt to buy our votes to pay our mortgages to justify increasing our taxes (after the mid-term elections) to pay our/countries debt back.

THIS IS YOUR MONEY THAT MAOBAMA IS ATTEMPTING TO BRIBE YOUR VOTE WITH AND YOU WILL BE PAYING IT BACK AFTER YOU VOTE FOR HIM. WISE UP!!!!!!!

History should have proven by now that you need to count your fingers after any association with Chairman Maobama!

Posted by Dew | Report as abusive

Chairman Maobama prints our money which increases our countries debt to buy our votes to pay our mortgages to justify increasing our taxes (after the mid-term elections) to pay our/countries debt back.

THIS IS YOUR MONEY THAT MAOBAMA IS ATTEMPTING TO BRIBE YOUR VOTE WITH AND YOU WILL BE PAYING YOURSELF BACK AFTER YOU VOTE FOR HIS MARXIST COMRADES. WISE UP!!!!!!!

History should have proven by now that you need to count your fingers after any association with Chairman Maobama!

Posted by Dew | Report as abusive

These people have absolutely no shame! They are desperately trying to buy votes for their agenda of turning this country into a third world socialist state with Obumbler as dictator. if they think the tax payers will stand for this, they are very sadly mistaken!

Posted by JiminHouston | Report as abusive

Some of you commenting are so out of touch. I am a hardworking american who can afford my house, and since I bought my home in 2007 the value has dropped over $100K. This is due to a number of factors, including people who could not afford their homes walking away from their underwater mortgages. The hit I have taken on value make it impossible for me to refinance or sell my home. A program like this could keep me from becoming one of these people that choose to walk away from a negative equity situation which is far out of my control.

Posted by rednosedpitbull | Report as abusive

Genius: Debt forgiveness = Taxable Event

Posted by mandman | Report as abusive

Genius: Debt forgiveness = Taxable Event
More 1099′s for ALL

Posted by mandman | Report as abusive

When are we going to stop this theft and rape of our nation and its people?
This is just another banker gift/bailout disguised under another name to deceive people into believe it is for their benefit. The money will go direct to the bankers and taken from your pocket via inflation and higher taxes. The gross amount of the load will be reduced yes, but don’t expect any payments to be lowered. They may reduce the length of time to payoff but likely won’t reduce payments.
The housing bubble must be corrected and this will prevent that from happening. Housing prices MAY stabilized but how will that help you as they create inflation by printing money and raising your taxes? Additionally they continue the invasion of illegal’s to reduce the value of your job by exploiting the poor who are attempting to stream across the border to escape the poverty in their own nation. They are bringing the poverty with them and to your home my fellow citizens. What jobs cannot be devalued via illegal immigration is via work visa’s (importing low cost employees) and tax benefits for companies just pick up and leave entirely.
The American people are being robbed, deceived, and their future stolen from them. At the same time they a devaluing the labor you provide and are holding up prices to benefit bankers via ‘bailouts’ and other deceptive terms. If they pass this – refuse to accept and leave your home if you must and find another place but do not allow another massive theft from our nation’s people and from your future, nor believe the lie that is truly a government sponsored manipulation of the market to the benefit of the bankers and elite that are now attempting to enslave us.

Posted by StopTheTheft | Report as abusive

Where is my bailout? Not fair. Everyone should get help on their mortgage.

Posted by myword | Report as abusive

A quick bit of math:
15,000,000 million mortgage
avg underwater guess $50,000

Thats $750,000,000,000 = 750 BILLION DOLLARS

I just refinanced and payed down my debt to get back above water – WHAT THE HELL WAS I THINKING !!!!

Posted by GM-GUY | Report as abusive

obama, rewarding bad behavior… again.

no wonder the country is in trouble. he’s busy buying votes while the ship of state sinks from the debt he created.

what aobut the people who work hard, buy houses they can afford and actually pay their bills???

REMEMBER IN NOVEMBER

Posted by jasonCITIZEN | Report as abusive

Why not just give every voter in November a hundred bucks to pull the lever for Dumbocrats?

Posted by Letsbehonest | Report as abusive

Gold is up today. Dollar is down and has been going down. Should this be done by obama, all bets are off. obama deciding winners and losers and passing the debt on to generations to come. There WILL BE a day of reckoning. IT WILL COME.

Posted by vikings4123 | Report as abusive

I believe that would result in taxable income to the mortgage holder that, if unemployed, may not have the means to pay. IRS will then require the homeowner to sell the property to pay the government!

Posted by RAubrey | Report as abusive

Screw it! Why dont they just forgive all home loans. Why only reward some people for their bad decisions. Let’s be fair now.

Want to make a diffrence… cut all taxes including corporate taxes. Make the Bush tax cuts permament. Do away with Income Tax and go to a Flat Tax on everything except Food and Medical care. You will collect more taxes and those that are here illegally will pay their share in taxes. Roll back Obama-Care and fix the Mediocare System and fix mal-practice law suits. Hold the Insurance Industry Accountable.

Put America back to work and manufacturing goods that we can sell world wide. Do not keep putting more tax and regulation on this country. The People can not handle any more burden for misguided policies of our Government (Dems and Republicans).

Posted by Will2010 | Report as abusive

to catmman: are you calling yourself irresponsible for buying more car than you can afford?

Posted by 1AmericanGuy | Report as abusive

The housing market crashed in my area. It is not my fault they decided to close the local military base. Now my life savings is gone, my house is going through a “short sale” and my family is split because of jobs. The house has lost 100k in value and I bought 8 years ago, far from the peak of the market.

What about those of us who went through a bank? Are we screwed? So now I get to pay for Freddy Mac and Fannie Mae mortgage people. What the hell?

Posted by fzbrick | Report as abusive

HES LYING AGAIN, HE WILL SAY WHATEVER TO GET HIS WAY THEN OOOOUUUCCCHHHHH!!!!!!!! HE WILL STAB YOU IN THE BACK AGAIN AND AGAIN

Posted by ernieoooo | Report as abusive

If free handouts should be given, it should go to students who finished school and now have to pay the loans back. They are paying the price on not finding a job after hard school work.

Nobody should get free handouts. Let there be a free market! Too much government intervention will always damage the free market and never help it. Did anyone in Congress take Economics 101. My God! I know Obama failed Intro to Economics. The guy can’t stop spending! JUST STOP GOD DAMN IT!!!

Posted by ReZ311 | Report as abusive

they should have done this in the first place. I prefer no bailouts but if they’re gonna do it they should give it to those that benefit most. It was the lenders that were spending money like drunken sailors. The economy is and will always be driven by main street which is why it should have been bailed out first.

Posted by mjhouska | Report as abusive

LETS MAKE IT SIMPLE,EVEN FOR THE DUMMIES !

EVERYBODY GETS TO REDUCE THEIR HOUSE PAYMENT BY 25%

Posted by MYVOTE | Report as abusive

Hope the market remains stable!

Posted by qwinki | Report as abusive

“there will be no more tax-payer bailouts for big banks, period.

It is easy to see now why Fannie and Freddie were left out of Financial Reform.

This bail out is no surprise… it has been planned for some time now.

Posted by Barbwire | Report as abusive

The loss in value is a paper loss. These speculating home buyers bought at the peak of the market and now we have to bail them out? How is this not the same as bailing out Wall Street speculators? A home is NOT and investment, quit pretending that it is. You wont recognize the loss until you sell the house. What in the hell does that do for the economy? It destroys it. Why? Because what happens when the pent up demand to sell these underwater homes suddenly become sellable (albeit for a short time)?
Of course people will try to dump them, what happens when they try to dump them? Supply goes up. What happens when supply goes up? prices fall. Hmmm go figure. Then we are all underwater. Nice going Keynesians! Welcome to the welfare state.

Posted by robx | Report as abusive

President Barack Hussein Obama (P BHO) Chavez is poised to deliver more Hoax and Chains to the weary masses. Obama Zombies – those useful idiots who think he’s really “The One” – should really get a thrill running up their legs on this idea.

Posted by NoACORNFan | Report as abusive

HEY OBAMA….WE NEED THAT LASER-LIKE FOCUS ON JOBS – NOT BAILOUTS!!!

Posted by Duck_Limbaugh | Report as abusive

Purchasing votes eh? Keeping home prices above what the market will bear using my tax dollars. F U mr. president.

Posted by CPA1976 | Report as abusive

When I bought my house, I paid no attention to what the bank said I qualified for. I bought a house with payments small enough so that I could still afford electricity, food, clothes and a car. If the past couple of years have taught me anything, it is that I was a damned fool. I should have bought the biggest, most expensive house they would let me have. That way I could be getting bailed out instead of watching my money go to subsidize the irresponsibility of others.

Posted by HenryCameron | Report as abusive

Simplest solution is to eliminate all Income Tax (for business and individuals) and open up immigration to individuals with a minimum net worth. That will immediately stimulate demand for Real Estate. It will also increase hiring if companies relocated the US to avoid corporate income taxes. No more reason for Corporations to move offshore. Halliburton will come back and share their huge War profits to boost our economy.

Posted by almakee | Report as abusive

This is insane. Not no, but HELL NO.

Posted by TX_Independent | Report as abusive

Forgiveness of debt is taxable income to the recipient. Just another ploy to increase taxes on the unexpecting.

Posted by gwalterc | Report as abusive

Not everyone that is underwater put less than 20% down. In fact, in some areas here in Michigan homes have lost over 50% of their value.

That said, this is a bad idea, and it is exactly as characterized: last ditch effort by 0bama and the Dems to buy votes.

Posted by LWASB | Report as abusive

These Socialists/Marxists will do anything, say anything they need to to preserve their power base long enough to enslave this still great Nation into Socialsim or worse. It is a sorry state of their mentality to attempt to balance the number of people that will be harmed vs the the number that will be happy getting a handout inorder to maintain power. The welfare of the Nation of no consideration whatsoever. Bring it you Socialist/Marxists scum we will be waiting for you on November 2nd!

Posted by JerryinTampa | Report as abusive

We bought our home in 2006- one which we could afford. Last year my husband lost his job and is still unemployed.
I contacted my bank and was told that we could qualify for a financial hardship and have our mortgage rate reduced. However, our first three payments on this new plan would be partial payments and would be reported to the credit bureau thus negatively affecting our credit. We are not willing to do that and will struggle on one way or another. All we were asking for was a reduction in our rate due to hard times without it affecting our credit rating.
Even if BHO does this, a. it will probably apply to only certain borrowers (read people who should NEVER have been given mortgages) and b. if it did apply to our situation, I still WILL NOT VOTE FOR HIM.
Keep your eyes on the prize people. Think Nov. Don’t be swayed by cynical WAG THE DOG tactics by the regime. We need to stop them in Nov or it WILL BE TOO LATE.

Posted by Tacitus | Report as abusive

Is this something we have to apply for or will all banks holding mortgages be required to figure out who is underwater and then ordered to reduce the mortgage? It would be really cool is they just did it all for us. What a friggin joke.

Posted by BossMan114 | Report as abusive

Wow, so those of us who saved, bought modest homes with in our budgets are once again expected to give more to reward the bad behavior of those who did the opposite.

Great way to encourage people to live within their means and act responsibly Barry.

And people wonder why I say I’ll never vote for another Democrat as long as I live.

Posted by uncledirtnap | Report as abusive

I’m not saying this is fair to tax payers, but being underwater does not mean you were unqualified to get a mortgage in the first place. Underwater does not mean delinquent in mortgage payments, it means your home is worth less than what you actually owe.

Posted by KL8118 | Report as abusive

why can’t we just put all the people who don’t like Barry S. into re-edjucation camps and take their homes?
then we can sieze their bank accounts and their cars.
the world would be better off without people who get in Barry’s way

Posted by infidel666 | Report as abusive

Still chasing that elusive solid B+

Posted by LITMAG | Report as abusive

Being in the mortgage business, I have a lot of clients whose homes are under water, and I feel for them.

That said, I agree that the free market is where the housing downturn should work itself out. Some people will pay down their mortgage anyway – the majority, in fact – and others will either have to face foreclosure due to hardship or will decide to walk away. That is too bad, but the free market is the best place to work this out. It will be much more efficient than with political intervention.

Posted by mtglenderatl | Report as abusive

“the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.” ??? BIG MISCALCULATION! How many people have mortgages that are NOT underwater? I say it’s more than 15 million. How many have mortgages with banks, savings & loans, etc? How many people are sick of paying for other people??? Should make for a really great TEA Party gathering scheduled for Sept. 12 though :)
I am DONE with these progressive Democrats though; 40 yr Dem. going Independent!

Posted by pennypatt | Report as abusive

Its so hard to make assumptions. However another trillion dollars in debt–how much more than 45,000.00 percapita can the US afford? So much wealth vaporized in 2008 I don’t even think this will help much.

To think outside the box, I think the whole financial system in the world needs a reset. Governments create the money themselves to pay off central banks and financial institutions world wide. Its all vapor money anyhow.

Governments can pay off 100% of consumer debt, including mortgages to credit cards, while they are at it.

People who have hung on to their homes will have real assets. People who haven’t can buy back into the market with strict banking regulations: 20% down minimum.

Consumer demand will advance without customer’s having to go back in debt.
Some will–to buy a car for example. So long as they qualify NOT in a sub-prime way. The economies would get back on their feet again.

Banks who count debt as assets will have to start from scratch under scrutiny. They should still make a lot of money from the investment side. Since stocks will rise in sync with consumer demand.
Inflation should be held in check intially by law. Which can be adjusted based on the market pressures.

What we don’t want however is a global currency. Maintain sovereignty at all costs!

Posted by Aleithia | Report as abusive

Obama has our best intrest in mind

Posted by infidel666 | Report as abusive

I just started the process of using some inheritance to pay down our mortgage so we will no longer be underwater in order to refinance at the current low rates. Seems like the responsible and smart thing to do, but after reading this, I think I should wait.

While I completely disagree with this handout, I am getting sick and tired of being left holding the bag by being responsible with my finances. Thank you for eroding the moral character of our nation, Obama.

Posted by jjphilli | Report as abusive

Let’s see – I have never owned a house – so, yes! I am getting f`cked!

Posted by DKeller | Report as abusive

It’s obvious that the Big O didn’t take ANY economics classes in school.

Posted by RedfishTX | Report as abusive

So because you decided not to pay even the INTEREST on your Option-ARM, I have to now pay or accrued principle? !#$@$%#!

Posted by MaroonPatriot | Report as abusive

In my understanding, Fannie May owns loans that were given to people who could not qualify for a conventional loan. This was pushed through by Democrats to allow “underpriviledged” people to own homes. When these people could not pay for these loans, it brought down the housing market, and caused a general real estate devaluation. Now the people, who have loans with Fannie Mae, that they could not have qualified for without these shenanigans, will be rewarded by having the taxpayer pay the difference in the worth of their property. Meanwhile, the taxpayers, who qualified for loans and are making payments, will get no relief, for the devaluation of their property, brought about by the people who could not afford a loan, and the government who set this up. This is such obvious manipulation by government, to redistribute wealth, that I am amazed no one is bringing this up.

Posted by castlerock | Report as abusive

I don’t see how it’s possible to forgive a portion of mortgages. First of all the value of a house is very subjective and moves from day to day so for the bank to place a value on it is full of challenges and is certain to be rife with fraud. Second, people vary greatly in the amount that they have paid into a house whether as a downpayment or by making mortgage payments over many years. This will only reward people who overpaid for a house and haven’t been in it for very long and/or put very little down. The only people who could come up with this type of program are people who haven’t been in the housing market very long and don’t understand how it works. They must have spent there lives in government.

Posted by JeffR | Report as abusive

I could have lied on a loan app five years ago, but I stayed in my crappy apartment because I knew I could NEVER repay a six-figure loan, and I had the integrity and decency to behave responsibly. Now I get tax-raped because Big O will force me to pay the mortgages for all the a-holes who lied to get their loans, after he uses my money to shrink the loan balances. So what about me? What about my neighbors? Are we then the bastard children? When do we get our renter’s bailout?

Posted by willyams132 | Report as abusive

DAMN IT. ENOUGH ALREADY. If you took a mortgage you can’t afford then you SHOULD LOSE IT BY NOW… there have been TOO many bail-outs… WE did NOT BUY – as we knew we could not afford it… BUT WE ARE HURTING TOO… HOW ABOUT RENTERS BAILOUT ? !… Five months ago, I was two hours from eviction.. TWO HOURS… the moving trucks were waiting out front for the sheriff to show up, when an uncle, I barely know, came to the rescue. WE ARE AGAIN IN TROUBLE LOOKING AT EVICTION… my self-employed business went south with the economy and the markets. THANKS OBAMA, and all I hear is bail outs for home borrowers and laid off…. HOW ABOUT SELF EMPLOYED who have cut down to bare bones and still NEED HELP. Sure extend unemployment forever, bail out stupid mortgages, let the rest of us live in a 10 yr old car.

Posted by mbankat | Report as abusive

Will this actually pump any money into the economy before the election ???

Processing the paper work alone will take months before any home owners know for sure.

Maybe some big banks will make hundreds of billions in profits from this and it will pump up the stock market right before the election …

Posted by Reality_Check | Report as abusive

Nomobama going through with their plan for tax payers to buy homes for demo special interest groups. Must stop breeding demos on welfare or it’s about over.

Posted by 1uncle | Report as abusive

What strikes me about this most are two thoughts. First that Congress and this administration are convinced they can simply buy reelection votes and rather than doing anything substantial all they ever do is throw good money after bad in that quest. Screw the future, it’s election day that counts. Sounds like Chicago politics…buy enough votes to win. But secondly, and equally disgusting to me, is that they seem to have assessed all of us Americans as “whores” who will do anything if you give us money. I for one am not a whore. And I am sick of the attitude that printing more money substitutes for doing some real work in DC that can fix PROBLEMS, not kick them into the future or the next administration. Obama pledged change, but he’s a carbon copy of his democratic predecessors. Enjoy your vacation Ms. FLOTUS…

Posted by hlizard | Report as abusive

This is not about helping anybody out.

It is about Democrats re-elected so they can continue to steal your children’s and grand children’s money.

Posted by Reality_Check | Report as abusive

Fannie Mae and Freddie Mac are credit cards with no spending limits – and Obama has control of them.

Right now Obama is having wet dreams about what he is going to buy with those credit cards.

No wonder Obama insisted in excluding Fannie Mae and Freddie Mac from the Financial System Reform.

Posted by Reality_Check | Report as abusive

The thing that really bugs me, is that for every person who just bought at the wrong time or lost his job, with an underwater mortgage, there are two people who went to the Bahamas ran up their credit cards bought a new car and wrapped it all up in a %100 loan to value on their house and now are in trouble. I could see maybe helping out those who need to move and are in an underwater position, but not everyone who ate up all of their equity, having fun.

Posted by Felindar | Report as abusive

I’m 20% under water and 1 month behind. I qualified for the home bailout program but the bank has never sent paperwork, even after calling them 20-30 times [Bank of America]. My home isn’t through Freddie/Fannie, so when the bail out comes, I’ll be left sinking.

Why?

Because I went to school, got an education, and work my tail end off to pay my bills. But, even those bills are way behind after a 5 month lay off. I’ve been sued by 3 CC companies already.

Where’s the revolution and how do I sign up? No. Seriously, how do I sign up?

Posted by CaptainObvious | Report as abusive

If they think this is going to buy them votes – they have got to be kidding. We have a mortgage that we’ve always paid on time for many, many years. For the government to REWARD people who took loans they could not afford and then expect a handout from US is MORE THAN ENOUGH TO MAKE MY BLOOD BOIL. No one took advantage of these people. All of you who have had mortgages know about ARM’s and what happens at the end of the adjustment period. If you didn’t know, the banks ARE REQUIRED BY LAW TO EXPLAIN ALL OF THAT TO THE BORROWER. It’s the getting something for nothing mentality. I’ve absolutely had it with these low lifes and their president. They are going down and taking all of us along with our kids and grandkids down with them.

Posted by mkj | Report as abusive

If you have a “good” mortgage and pay it on time, you get nothing. If you bought a house way over your head (with possibly a liar’s loan), you get a bailout. The cost of the bailout will be covered by the “good” taxpayers. Wealth will have been redistributed. Government will become yo’ daddy and yo’ momma.

Posted by TexGEOas | Report as abusive

What about the people who OWN their homes and worked hard in their lifetime for it. Any action of this type would create riots in the streets and be a reason for impeachment.

Posted by EyeoftheEAGLE | Report as abusive

Obama should do the right thing and simply resign..

Posted by EyeoftheEAGLE | Report as abusive

Keep Burying America in debt Mr Obama. I have worked 2 Jobs along with my wife in order to keep my mortgage current. I am not interested in paying someone elses bills.

Posted by dencal26 | Report as abusive

How about paying back all the losses in my 401K from Great Depression II?

Posted by Nothinsforfree | Report as abusive

Oops too late. The foreclosure sale notice was posted on my door yesterday morning. Auction at the courthouse in early Sept. Would have been nice to keep paying, but the wife lost her job 18 months ago and the savings is gone.

Posted by VigilantSatyr | Report as abusive

The proposal makes a lot of sense to me. Why should people lose their homes just because their property value was overinflated by Wall Street con-men?

These scumbags purposely wrote bad (sub-prime) loans, then made money betting against them (via credit default swaps), and are now scooping up properties at rock bottom prices after the bottom fell out of the market. Non-white’s were disproportionately affect by this scam.

This fiasco exemplifies all that is wrong with capitalism. You right wing nutcases should realize that bailing out the victims of this con-job is your best hope for saving your beloved capitalism and white priviledge. Pay now or pay later…

Posted by Hanglyman | Report as abusive

The IRS taketh and the Feds giveth it away – after they skim 80% off the top.

Posted by Nothinsforfree | Report as abusive

Lower the bar even more Mr. O. 7B to Pakistan, Michelle on an expensive “private” trip to Spain, and our economy goes deeper into the &!%tter. Let’s reward the financially irresponsible and besmirch the others! How long are we going to put up with this? We need to restore personal responsibility and integrity in this country, not promote sloth and greed. Someone come up with a better plan and let’s vote them ALL out.

Posted by observer56 | Report as abusive

So here in Obamaland, the name of the game is suck up to the voters in time for an election. The people who bought outside their means can be rewarded by the same government that relaxed regulations and allowed them to get in this kind of debt in the first place. Meanwhile, what about the people who are living within their means, struggling to find or keep jobs and put food on the table? What about people who need jobs? And who will end up paying for this next debacle? The people who are struggling from day to day will end up with higher & higher taxes. This president is a tragedy, and has no idea what the real priorities are for Americans living out here in the real world.

Posted by tampamom25 | Report as abusive

Unbelievable. Government bailouts don’t work and have never worked. Obama is just going to keep flushing your tax dolars and your borrowed dollars at that, down the drain.

Posted by curls1 | Report as abusive

You guys just don’t get it, nothing is more important than getting reelected. Who cares who gets hosed as long as the millionaire congressmen or soon to be millionaire congressmen all get reelected.

Posted by soupysays | Report as abusive

They jammed the bondholders before (remember the auto bailouts) and they think nothing of rearranging private contracts (remember the dealer closings?). This would not surprise me one bit. But, who really benefits? The homeowners are upside down and can’t pay anyway. This is just forcing the lenders to recognize that fact and giving them a government bailout to make the medicine go down. End result is that the lenders are the ones receiving the largess (again).

If the banks would act responsibly and re-negotiate loans, this would not be needed.

Posted by cebva | Report as abusive

TAXES – For example – If they forgive $50K in debt, that becomes income, no? If you pay about 35% total income taxes, you would owe $17,500! If you can’t pay your mortgage, how are you going to pay these taxes?

How about 2nd TDs like helocs? If you are only underwater because of the 2nd, how do they handle that?

Posted by exnuyawker | Report as abusive

Sounds like yet another silly and useless attempt to prevent the housing market from attaining its natural point of equilibrium between supply and demand, and directly benefiting the banks, who are essentially still insolvent.

What a mess!

This frivolous line of thinking already sunk Fannie and Freddie, and eventually it will sink everybody else, and leave us taxpayers, to pay the bills.

Posted by yr2009 | Report as abusive

You can’t incentivize businesses to hire by giving them money. They’re not thinking short term – “I get $10k for hiring a new person”, they’re thinking long term – “my taxes are going up next year since the Dems aren’t going to renew the Bush cuts, and passed healthcare legislation that is going to further cost me money in fines/increased premiums/etc, I had better hang on to any money I have to hedge against that”. No reasonable amount of money in the short term will cause businesses to hire.

Further, let’s just give money to people. Not everyone, just the ones that went nuts during a government caused housing bubble and bought houses they couldn’t afford at prices that were sky high. The rest of us that waited until the right time, and put down a reasonable down payment, well, screw those people.

Why not take all of this so-called stimulus, TARP, HARP, HAMP, etc. etc. etc. ad nauseum cash and apply it towards the historically high deficits we’re racking up. You can NOT spend your way out of this hole, you have to get the hell out of the way and allow the market to correct itself properly (which includes irresponsible people and businesses to lose everything they own if that is what it takes to flush their debt out of the system) and ensure that businesses are confident that they can make money with you in office.

Posted by triptyx | Report as abusive

So our Socialist president must continue to buy his votes from the irresponsible people who created this mess in the first place. What a joke this man is, and his supporters are pathetic losers.

Posted by scoob | Report as abusive

the dirty little secret is, If money is forgiven on a refinance, ANY AMOUNT. your finance company WILL send you a 1099 TAX form at the end of the year and you will owe taxes as you received the value of the refinance.

You could be owing taxes on $30,000 of “Income” you did not get!

Posted by framis | Report as abusive

It’s bad enough poor renters are having their money stolen to lower mortgage rates for rich homeowners so they can continue to go on expensive cruises. When are renters going to get some of this government cheese? These crooks have already made millions of people homeless by inflating home prices & stealing untold amounts of wealth from the underclass. We need to rise up and take back this country from these people that have become wealthy beyond their wildest dreams from this housing scam which has ruined our country. They are all crooks from Tax Cheating Timmy G. to Barney F. that was blowing executives at Fannie Mae! Listen to the Blago tapes, it sounds like the Soprano’s & it involves the highest levels of our government. Why bother working like a slave to live in a shack while they continue to steal my money to give to rich people. I’d rather fight to live free & stop the massive theft out of my pockets!!!

Posted by moonmac | Report as abusive

JohnZNYC, it’s called wealth redistribution, but you don’t have to be wealthy. This is all accomplished on the backs of the middle class. This governments definition of wealthy is so badly skewed it’s mind boggling. It’s all about wanting the world living in a bubble and in one that has no consequences for ones actions. Wish I could’ve known and made investments and financial decisions based upon a government guarantee. It’s like Sesame Street for some, and a Nightmare on Elm Street for others.

Posted by Disenfranchised | Report as abusive

How about we fire this clown and all of his cronies? Consider this: He applied for the job, got elected by people that wanted to participate in a historic election (they would have voted for a cow if one would have run since we’ve never had a cow for president), misrepresented his ability to lead, surrounded himself with incompetent people, is obviously in WAAY over his head and is failing miserably right before our eyes. In the private sector he would be fired – plain and simple. That’s what has to happen here. The sooner the country comes to grips with the reality of a bad hire and fires him (them) the sooner we can get back to rebuilding the country and stop being the laughing stock of the entire world.

Posted by earnie | Report as abusive

To those who say our debt burden is too high the President replies “I have only just begun to spend!” In today’s United States it no longer pays to be a legal citizen, healthy, well educated, married, own a home that you can afford, and have a good job with good benefits. All that qualifies you for is to become a target for the Obama wealth re-distribution plan.

Posted by RalphCramden | Report as abusive

>>How about giving the hardworking people who contribute tax dollars to the economy a break for a change???????

Hardworking people who pay taxes are less likely to vote for democrats.

Posted by KurtKenya | Report as abusive

As Barry Obama tries pulls out all the stops to head off a catastrophic November bashing…I think Barry himself should relinquish all his personal assets to fund the first portion of this vote buy…Then see how quick he spins away…

Posted by HappyG | Report as abusive

Look folks…the blame game is pointless. Stabilizing the US Housing Market is the KEY to ending the recession. If the cramdown bankruptcy bill would have passed in May 2009, the real estate market would already be stable and more people would have kept their homes…this is just an executive version of that bill.

Hey, we’ve already paid Fannie & Freddie the $75billion. The bankruptcy cramdown would have done the same except not on the backs of taxpayers. Thank Republicans for the extra TAX! Many members of Congress already got their $$$ from the banks so cramdown failed. Wanna blame somebody, blame the GOP, Big Banks and their stranglehold on Congress for many years before President Obama.

The irony is when we try help THE PEOPLE, it’s a handout….when we help the banks, its a bailout! This is non-sense. Moral problem if it’s a US Citizen but no moral problem when a bank walks away from a bad investment. The only reason people are walking away from their homes is they are now thinking like bankers…it’s a business decision. This gives them a reason to keep paying and keep their home!

Posted by BAKERLAWFL | Report as abusive

President Obama could pay off my mortgage, and I still wouldn’t vote for him in 2012.

Posted by ILOVEAMERICA | Report as abusive

Rewrite the mortgages for 50 years…if they then default, throw their asses out on the street…obviously they can’t afford their surroundings…

Posted by HappyG | Report as abusive

Stimulus again? Ugh. Fix the bled loss of jobs!!! Jobless recovery is the problem. Stimulus is a band-aid to the real problem.

Until the un- and underemployed have money from jobs, they will not be purchasing much of anything so the economy does not register them casting their economic votes as to what should be produced. Until they have money, businesses won’t hire the people to produce goods to satisfy the complete aggregate demand (which is currently emaciated by lack of money because people don’t have jobs). Sense the catch-22 here??

The solution is to 1) provide a forum people to register what they would want for a best life, 2) aggregate this demand, 3) design the infrastructure to produce all we really want, and 4) provide online training to learn the skills to create and maintain this new infrastructure.

When all people who want to work can do so and be paid handsomely (because their value is enhanced by the newly learned skills), we then have essentially “Full Participation”, employment that is only short being full by the number of people retraining, a newly robust tax base that can provide the kind of tax revenue that will lift our economy out of the jaws of impending catastrophe — no more need for deficit spending and finally get back to paying down the national debt instead of currently heaping more on in record fashion.

Posted by GordonFBJ | Report as abusive

I am against handouts, but I’m also getting tired of irresponsible comments by people like catmman (although I agree with him in theory.

Not everyone whose house/mortgage is underwater bought more home than they could afford. Many of us bought homes that we could afford and we aren’t suffering because an adjustable rate mortgage adjusted and we could no longer make the payments. No, we continue to service our debt while watching the value of our property erode. I bought at a bad time at ridiculously inflated prices and I’m paying the price for that. But by no means did I get into a mortgage I couldn’t afford.

And although there are certainly many, many people who fit the description and helped to put downward pressure on the market, simply claiming that everyone who owns a home worth less than the mortgage “bought more than they could afford” is irresponsible and ludicrous.

Posted by gwlucas | Report as abusive

It seems as each bail-out increases the opportunities to those not paying their mortgages. We do need some middle ground since all homes have lost substantial value- even those with no mortgages.
LowerFloridaTaxes.com

Posted by lowerflorida | Report as abusive

Fairness requires that all the Countrywide mortgage packages sold-off by BOA at pennies on the dollar to CWALT, Inc. be included. These are generating major servicing cash and foreclosure fees for both Bank of America and CWALT INC’s servicer Bank of New York Mellon.

Posted by MAnyse | Report as abusive

Great, let’s offer more rewards for irresponsible behavior … and then act surprised when the irresponsibility increases as a result.

If he wants to fight deflation and buy votes why not just offer a $2500 cash payment for every U.S. Citizen … it rewards everyone equally, increases the money supply to fight deflation and costs less than a trillion dollars.

Posted by jrboss | Report as abusive

I put 20% down on my home. It has lost more than 20% in value. That’s not your fault, folks, and I don’t expect you to make up the difference. But if Obama is dumb enough to do this, and YOU are dumb enough to let him, then I’m going to be smart enough to take advantage of you. If you can’t beat socialism, exploit it. Or, as a wise man once said: “Never give a sucker an even break.”

One of the insidious things about government entitlements is that, since we are all forced to pay for them under threat of imprisonment, it makes sense to milk them for all they’re worth. I’m always on the lookout to find tax incentives and credits to recoup some of my tax expenses. To date, you fine folks have spent $25,000 to pay for the adoption of my two Russian daughters, you’ve paid several thousand dollars toward the purchase of a natural gas-powered car, you’ve bought me a new furnace for my home (even though the old one was fine, but I wanted to save on utility bills), etc. All legal, and all STUPID on your part, suckers! Don’t like it? Vote Conservative.

Posted by MQBitsko | Report as abusive

Houses in exchange for votes. plain and simple. So those of us that planned ahead and played by the rules – have paid out bills on time and didnt overextend are now going to have to pay for those that purchased homes they knew they couldnt afford as Obmama forgives their loans. —

I’ll be penalized for paying my bills. Obama’s effort to buy votes will bankrupt us all.

This administration will continue to drive us into ruin.

Posted by Cabin_Fever | Report as abusive

Pray for our incompetent president who thinks money grows on trees.

Psalms 109:8

Let his days be few; and let another take his office.

AMEN!

Posted by RightStuff4 | Report as abusive

We can help mortgage holders all we want but if they’re unemployed, back to square one. Staggering…….

Posted by RodeoTina | Report as abusive

This is outrageous if true! We cannot afford to keep paying for poor decisions made by government and consumers! Obama and is ilk have to go. They are killing the country. This is what happens when you give the keys to the car to kids! Where are the adults?

Posted by TexJal | Report as abusive

OH NO!!! another stimulus…we will Never GET OUT OF DEBT!!!! THIS PRESIDENT IS INSANE! just arrest DODD, FRANK AND RAHM FOR THEIR LYING ABOUT FREDDIE AND FANNIE, THOSE LIARS MADE MILLIONS AND COOKED THE BOOKS, THEY ARE GROUND ZERO FOR THE MESS!!!!!

Posted by justncase | Report as abusive

ANOTHER IDEA, STOP TAKING VACATIONS WE CANNOT AFFORD!!! AND STAY OFF THE GOLF COURSE AND THE PHONE, STAY INSIDE, AND NO COMMUNICATION WITH THE WORLD. FOR THE NEXT YEAR, THIS WILL HELP THE ECONOMY IMMENSELY!!

Posted by justncase | Report as abusive

The moral hazard consequent to such a forgiveness of indebtedness would result in a political class struggle unlike any previously encountered in this country. It would pit Americans in default against everyone else. In November, no Democrat could get elected, not even as dog catcher. To avoid such a counterproductive outcome, the Administration should simply forgive indebtedness on every mortgage, not to exceed $150,000. That would provide a stimulus and stop the progressive slide toward deflationary, debt driven paralysis experienced in Japan for the past decade.

Posted by youreminenece | Report as abusive

Where is Mr. Obama going to get the money for this spending spree? Out of our veins maybe?

Posted by Pedro_64 | Report as abusive

As an American who has sacrificed, pinched pennies and done without to pay his mortgage off, I despise this thief of a president who continues to steal from me and my family. The sooner my state secedes from this corrupt nation of thieves, the better.

Posted by 1crazytexican | Report as abusive

I am no freeloader, I have owned and made money off of 5 houses over the years, and then I bought a house in florida april 2008 and a week later lost my 26.00 an hour job. Paid 160 and the last appraisal was 55,000.00. HOA tripled due to all the foreclosures in the neighborhood. I am no fan of Obama and I know he is just buying votes for the democrats. I will take any relief I can get but they are never getting my vote.

Posted by dontbelieveit | Report as abusive

If Obama does this I am going to be furious beyond belief. Why should I bail out people who could not comprehend what an adjustable rate mortgage was? Obama has it wrong. People aren’t mad that we’re bailing out Wall St instead of Main St. They are mad we are bailing out irresponsible people (both Wall St and Main St).

Posted by FreeLouis | Report as abusive

This is designed to buy mid-term election Democrat votes. The policy would reward financially irresponsible Americans and the political party whose vocal rejections of Fannie Mae/Freddie Mac oversight helped lead to the housing collapse. Write your Senators and Congressional reps, jam the phone lines, man the barricades. We’ve got to take back our country from those lying, stealing, irresponsible wolves.

Posted by coolbreeze007 | Report as abusive

A possible way to reward borrowers who are current on their payments and would like to trade up would be to let them take over a larger loan and turn their house and loan back to the bank. The banks win and home owners who can afford higher payments win.

Posted by donwilliams | Report as abusive

I am no James Carville, but in addition to the fact that this idea is Constitutionally perverse, inequitable, and will engender untold unintended consequences, it is really stupid politics.

This administration is tone deaf to public opinion. If they try this the Tea Party and worried Independents will look like soothsayers. This “stop or I’ll shoot” with a gun to my head strategy (witness Tuesday’s MO vote on Obamacare) is incredible.

If Democrats want to lose both the House and the Senate in November, by all means pursue this!

Posted by Jlloyd | Report as abusive

Investors are buying the foreclosures at the court house steps or from the banks in short sales, settling on them and then renting back to orginal home owner at fair market value. THE GOVERNMENT COULD DO THIS!
The bank and foreclosures mills are manufacturing documents to slide under the courts nose when the cases are uncontested in foreclosure and making a nice profit that is not pasted on to the true investor since they have no idea who that would be! THIS WINDFALL PROFIT SHOULD BE GOING BACK TO THE AMERICAN CITIZENS BY WAY OF PAYING DOWN THE DEFICIT!

If there was a true party of Interest they would never allow the home to be sold 20 to 40% under fair market value and fliped in a few short weeks at a windfall profit. THIS IS THE AMERICAN PEOPLES BAIL OUT REFUND THEY ARE TAKIING!

Banks have rules that say no REO agent shall have more than 100 REO listing yet only a few select real estate agents in any city get to handle hundred of sales a year and also earn windfall profits and sell the REO’s to the first bidder sometimes a friend or family memeber while the other agents are starving. Again who’s interest are they protecting certanilly the the investor/owner.

The Banks used secutitization to sell the notes off sometimes to more than one party. These are very different type loans than we had prior to 2002. No one is following the rules except the homeowner who is stuggling at this point. Unemployed and Underemployed. Good for you if you still have a job and do not find yourself in this foreclosure mess. Don’t judge until you walked in someone shoes.

Attorneys who fight foreclosure are offering to take the case for what fair market monthly rent is in the area and if they win want an equity share in future value.Not a bad deal for the attorney! Everyone is out to make money on the homeowner.

NO wonder folks polled say they never want to buy again! They are being raped by everyone!!!

I want my home, I can afford a a payment but got behind due to reduced income and a medical issue, I did not buy above my means. I tried to work with the bank with no luck. I can’t walk away till they foreclosre because I am responsible for the home. If I could pay fair market value with a modification with a true party of interest that allowed for shared equity in the future I would jump at the chance to keep my home!!

I just don’t think the government can figure out how Wall Street pulled this off or they know and they do not want it to go public.

Homeowners are not asking for a FREE HOME in a Foreclosure fight they are asking the court not to reward the entities who are submitting false documents to get a FREE HOME. Home Owners are DEMANDING the bank show proof of ownership with a full accounting of what transactions have taken place on the home owners Loan Number. A pretty straight foward question yet no bank seems to want to turn over the accounting documents. Why is the court accepting this??

I will loose 250,000 with down payment and monthly payments over the past five years if my home forecloses. I am vested in this home and would love to talk with the investor I know as a homeowner and an investor we could work it out. We just have to many middle men in the way who have their own agenda’s!

Posted by Lied2 | Report as abusive

Right, and who’s going to administer this program? The loan mod program has not even figured out how it’s supposed to work.

Look at the number of completed mods compared to those who have applied. One family member is currently going thru a 3rd attempt at a mod and not thru any fault of her own. The Fed just keeps switching the rules because at the outset there were no rules … good luck with all that.

Posted by whathavewehere | Report as abusive

“The political calculation is that the number of grateful Americans would be greater than those offended”

Um, One in five would be grateful while enraging four of five….

Posted by dave03835 | Report as abusive

Ever get the feeling they’re never going to stop until every last one us who isn’t a politically connected billionaire is living on food stamps in section 8 housing?

Posted by naifmabat | Report as abusive

Here is the real deal – the tax payers are already paying the banks for the loss on every foreclosure via FDIC. So why not simply help the taxpayers by the same amount directly by adjusting mortgages to the mkt value? Makes perfect sense. Same amount and damage that we will have to deal with anyway as taxpayers, but it goes to the homeowners rather than the banks who have not done anything. Then the homeowners will be able to stimulate the economy when their payments are drastically reduced and fears removed.

Forget your car – that is BS. The banks are deserving of this, they appraised homes at these values even when their analysts knew this whole thing was going to blow up.

Posted by billyjarrins | Report as abusive

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves something for nothing from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s great civilizations has been 200 years.”

Alexander Fraser Tytler (1742-1813)

Posted by cfal | Report as abusive

I don’t think so, James. I think you hit the publish button a little too soon.

http://www.marketwatch.com/story/report- no-massive-refinance-program-on-the-agen da-2010-08-05

As it was, the odds of something like a unilateral change in refinancing would have been blocked in the courts by bondholders. I mean, this would be stealing from bondholders.

Posted by DavidMerkel | Report as abusive

There is no better way to say this, but F!! this; it is pure buls!!t. Where is the fairness in this. It’s nothing more than generational theft. Dear Mr. Obama, do not do this, it’s morally wrong.

Posted by AkfromLa | Report as abusive

ahhhh.. the sound of civil unrest – the economy getting better??

I pull credit every day – credit scores are trending lower

I see home values every day – values are still declining

I see consumers income everyday – income is trending down

I see consumers assets every day – personal savings is trending downward

I see the best of the best borrowers finding it very frustrating to refinance or purchase a home as underwriters are asking for documents never asked for before…

I talk with ailing homeowners every day – successful loan modifications under President Obama’s Making Home Affordable plan are minimal and quite frankly a joke as banks put forth no effort to modify loans

Strategic Defaults are on the rise – the number of consumers who have the ability to pay, good credit and a solid job but are fall further underwater with their homes value are walking away in masses.

Strap on your seat belts people… this ride is about to get rocky…

Posted by LewisPoretz | Report as abusive

[...] Some 15 million of the approximate 55.95 million mortgages nationwide are said to be “underwater” or in negative equity, i.e. the market value of the home is less than the total value of the mortgage. That’s about 26.8 percent of all mortgages. And according to Reuters’ James Pethokoukis, it represents about $800 billion negative equity. [...]

[...] sprider lite intressanta tankar, även om det brukar ske i mindre kanaler. Häromdagen skrev Reuters James Pethokoukis ett intressant blogginlägg dar han kommenterar ett rykte om att Obama överväger att [...]

[...] So what makes her a prophet? Here are some headlines just from this month. [...]

[...] Some 15 million of the approximate 55.95 million mortgages nationwide are said to be “underwater” or in negative equity, i.e. the market value of the home is less than the total value of the mortgage. That’s about 26.8 percent of all mortgages. And according to Reuters’ James Pethokoukis, it represents about $800 billion negative equity. [...]

[...] just a rumor…it’s just a rumor…it’s just a rumor… And it better stay that way: Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington [...]

[...] August Surprise from Obama? (Reuters) James Pethokoukis hears rumors that the Obama administration may order Fannie Mae and Freddie Mac [...]

[...] August Surprise Sounds Like Election Scam James Pethokoukis Reuters Aug 6, [...]

I read the comments and i am jsut shock at the blindness of people and the untenable positions and dilusional perspectives they have on this world and our Great Country. So we are all on the same page, its is and became so (a Great Nation), because people are and were free to take care of themselves and to take the risks of life they chose. God help the American people who have been robbed of that immeasurable joy and satisfaction;taking care of one’s self and family and a life tempered by the challenges unbuffered by “Big Brother”. Shame on the liberal and minority leadership and the “phonebook lawyers” for being the enablers and promoters of such a big fat lie: Government is here to help you! And to BakerLawFl, you must want this country to look like a cross between mexico and europe; you give the judicial branch the latitude to manage the marketplace and you’ve seen the last “Free Market” capital available for lending transactions and mortgages. How much you want to bet BakerLawFl is a “trial lawyer”.

I dont know (beyond a reasonable doubt) whether the President is as corrupt and narcisitic as he appears or he is just that shallow or hollow of a man. Either way if WE THE PEOPLE come november dont throw every bum out of congress that we can and start shrinking what’s inside the “Beltway”, well then WE THE PEOPLE… “get the government that we deserve”…I think that was Lincoln.

God Bless America and God Speed WE THE PEOPLE to a Revival of our souls and wisdom for the age.

Posted by sensewfla | Report as abusive

[...] administration had to come right out the other day and squelch a rumor making the rounds, a real wild fire, that Fannie and Freddie were going to offer some loopy [...]

[...] Here’s a potential Obama bombshell that would shake up the 2010 midterms: [...]

[...] An August Surprise from Obama? | Analysis & Opinion |. This entry was posted in Spread The Wealth. Bookmark the permalink. [...]

[...] to this possibility. Here is what some are cautiously saying publicly. This from Goldman Sachs: An August Surprise from Obama? | Analysis & Opinion | How the hell can the Yanks afford this? __________________ I live in La La [...]

In the near term it would help underwater home owners. However it does not address the stronger underlying issues in the economy – mainly unemployment.

The amazing rate at which the federal debt has grown in the last two years is making people very nervous. I think the long term effects would be negative.

Until there is an underlying strength and confidence in the economy, there won’t be a real recovery for housing.

Posted by AgentBobSells | Report as abusive

[...] every effort to get help to the American people who are still suffering from the Bush recession. There’s a rumor being floated now that people could see a principal reduction: Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington [...]

[...] by Kris Berg on August 6, 2010 Treasury Department puts kibosh to Fannie/Freddie mortgage debt forgiveness rumors.It all started here. [...]

[...] officials knocked down rumors on Thursday about any plan for new programs–dubbed an “August Surprise” –to streamline refinancing or cut mortgage balances for homeowners in a bid to stimulate the [...]

[...] their clients privately to this possibility. Here is what some are cautiously saying publicly. An August Surprise from Obama? | Analysis & Opinion | I am so glad I put 20% down and continue to overpay my mortgage every month. discuss amongst [...]

This is blatantly unfair.

If those people are going to get part of their mortgages written down, then write down the mortgages of the rest of us instead of making the people who play by the rules look like fools.

And here’s a prediction. Home prices are still too high (according to the Case-Shiller graph), they will still drop in price if the economy does not recover. I base this prediction on the Obama/Dem agenda (cap-and-trade, and amnesty for 12+ million) as well as the fact that we have sent millions of jobs overseas over the last 10 years and this is going to continue.

There isn’t going to be a real healthy recovery until we get manufacturing back here. Manufacturing jobs create wealth because it require labor to extract natural resources, it requires skilled labor to process those resources into useful materials for building things, and it requires skilled labor to design and build those useful materials into things we want and need. This creates wealth. For a simple example, if somebody goes into the woods and chops down a tree and then takes the tree and makes 2×4′s out of it, those 2×4′s are worth something to somebody.

Posted by So_Cal_Kramer | Report as abusive

Don’t be upset. The fiscal budget for 2010 is $3690 Billion. “A $200 Billion Stimulus” is chump change in comparison.

For example, we pay over $260 Billion in interest for loans every year. If a large portion of those loans are forgiven, then we will save significantly on interest payments, and if Fannie & Freddie recover because of this move, we will make/save nearly $3000 Billion through our bailout investments.

This is the best possible play the government pull to win over US support. It would have been done long ago but Bush’s plan only helped big business. Obama cabinet focuses on the people (votes), they have this move up their sleeve, IT WILL BE DONE!

Posted by whocouldshebe | Report as abusive

[...] Now that another bailout is in the works, I’m convinced, disgusted, and nearing desperation at the fact that the only ones benefiting from all this are those who led the way in the dishonesty, both lenders and lendees.  This action will not help me or anyone like me.  It will only serve to prolong the pain as the thieves in the system are allowed to continue to play the game without consequence. [...]

[...] From Reuters:  Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011. [...]

This insane! When will this debt funded spending spree ever end?

What about all the people that have already lost their home? What about those that have lost their jobs?

What about the millions of responsible hard working Americans who are also suffering and have lost their security without any prospect of a government handout or bailout; are they now to be saddled with yet more government debt and ever increasing taxes?

Posted by DCM102 | Report as abusive

[...] The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. http://blogs.reuters.com/james-pethokouk is/2010/08/05/an-august-surprise-from-ob ama/ [...]

[...] voters: The spending bill for Teachers is pure politics. And if President Obama does bring an “August Surprise”, I would submit that this will enrage voters because it’s more of the same: penalizing the [...]

[...] stimulas? Obama Admin squashes rumors of mortgage bailout before midterm elections Reuters reported that Main Street may be about to get its own gigantic bailout. Rumors are running wild from [...]

[...] LINKS: Reuters – An August Surprise from Obama? [...]

Unfortunate this is only a rumor. Sooner it is done, the better for the economy. How come banks can pass on toxic assets (when they report loss or file taxes), but homeowners, millions of whom have lost 50 percent and more of the value of their homes, must hold on and commit financial suicide while the banks feed fat.

Posted by PloughmanWay | Report as abusive

[...] (8/5 ’10): “An August Surprise from Obama?” Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington [...]

[...] Posted by CharlesDavenport From Reuters – An August Surprise from Obama? | Analysis & Opinion | Disturbing rumor. Buying more votes with my money. For some reason, it sounds like they are only [...]

Give each family a 75,000.00 stimulus check. They could pay down their debt( mortgage payment), invest, provide a college tuition, buy a new car, down payment on a 2nd home.

This was the suggestion of one Rush Limbaugh, But I doubt Obama would adopt this option.

Posted by WilliamNowlin | Report as abusive

What people don’t realize about any type of debt forgiveness is, the IRS see’s the full amount of the forgiven debt as INCOME. So, if you make $50K a year, and the forgiven debt was $30K, you would owe taxes on that additional $30K of income.

Posted by mountaineer2006 | Report as abusive

I am seriously considering becoming reckless, careless, and irresponsible. Apparently living in the moment and having no regard for the consequences of ones actions are not only the order of the day, but they are endorsed and thoroughly encouraged. What in the hell have I been thinking?

Posted by uniquescreename | Report as abusive

Reckless, careless and irresponsible bankers, brokers, and insurers all got us all into this mess by not doing due diligence. They were more concerned with earning fees than they were with the quality of the loans because they were passing the risk off on others. They were the swindlers in these transactions and they all got made whole, when they should have gone to jail, or been taken out and shot. Why should the swindled not be given the same treatment? Why is it that the sharpies, who always get theirs, always say I’m all right, Jack, and pull up the ladder behind them? If I must go into debt to help someone, I would far rather do it for the honest little guy, struggling to feed his family on the bottom, than the scum that always rises to the top.

Posted by amboycharlie | Report as abusive

[...] I hope this is just a rumor. Seriously. You want to tax renters (about 35% of us) to help pay for mortgages for people who entered knowingly into a business transaction that sadly did not end well? I truly feel sorry for them. I have several very good (and responsible) friends who are in trouble, and I understand the issues. They just bought at the wrong time. But what about my investment in a start-up that failed? People who are behind on credit cards? If you bought a new car, you are underwater the moment you drive the car off the lot. Help for those? Where does it end? Hundreds of billions of debt that our children will have to pay? Say it ain’t so, Joe. You can read the whole blog if you have adult beverages or blood-pressure medicine nearby. http://blogs.reuters.com/james-pethokouk is/2010/08/05/an-august-surprise-from-ob ama/ [...]

[...] I hope this is just a rumor. Seriously. You want to tax renters (about 35% of us) to help pay for mortgages for people who entered knowingly into a business transaction that sadly did not end well? I truly feel sorry for them. I have several very good (and responsible) friends who are in trouble, and I understand the issues. They just bought at the wrong time. But what about my investment in a start-up that failed? People who are behind on credit cards? If you bought a new car, you are underwater the moment you drive the car off the lot. Help for those? Where does it end? Hundreds of billions of debt that our children will have to pay? Say it ain’t so, Joe. You can read the whole blog if you have adult beverages or blood-pressure medicine nearby. http://blogs.reuters.com/james-pethokouk is/2010/08/05/an-august-surprise-from-ob ama/ [...]

[...] the mid-term elections. As a result, Wall Street is expecting a big “surprise” in the form of a massive GSE refinancing plan, an unbridled expansion of the unsuccessful HARP [...]

Forgiving debt is a form of bankruptcy. This possible action is a form of forgoing foreclosure and allowing people to stay in their homes during this crisis.

A better way with less impact on the economy is to allow the Feds or Banks to own the “Excess Debt” in people’s homes and offer owners a way-out by charging affordable rent to continue to live there. People should be allowed to keep their market value interest in the home. Home values are going nowhere, at least in my lifetime. There is no longer an “American Dream” for the younger generation.

It is unconscionable to just kick people out on the streets, due to the bad timing and encouragement by the shyster banks or mortgage companies, who knowingly allowed people to take “the deal of a lifetime.”

The Real Estate “Bubble Burst” was inevitable, although I did not believe market values would fall this far. The Feds and the Financial Institutions, who caused the crisis, should assist the public in retaining their home, or find them a more affordable place to live in a similar place that they had prior to the Great Re-Pression of 2008/2009.

There are enough “abandoned” homes now to allow people to “downgrade” to more affordable living quarters prior to the “forced upgrade” to higher living. This plan would require major coordination by Fannie and Freddie. It won’t happen, but it is a better plan than forgiving debt.

Posted by Kouel | Report as abusive

[IPTD-435] Shiori Inamori – Beautiful School Girl, Businesswoman, and Young Wife …

I found your entry interesting thus I’ve added a Trackback to it on my weblog :)…

I say take the mortgage relief and sack the incumbents.

Posted by Ruler4You | Report as abusive

[...] I hope this is just a rumor. Seriously. You want to tax renters (about 35% of us) to help pay for mortgages for people who entered knowingly into a business transaction that sadly did not end well? I truly feel sorry for them. I have several very good (and responsible) friends who are in trouble, and I understand the issues. They just bought at the wrong time. But what about my investment in a start-up that failed? People who are behind on credit cards? If you bought a new car, you are underwater the moment you drive the car off the lot. Help for those? Where does it end? Hundreds of billions of debt that our children will have to pay? Say it ain’t so, Joe. You can read the whole blog if you have adult beverages or blood-pressure medicine nearby. http://blogs.reuters.com/james-pethokouk is/2010/08/05/an-august-surprise-from-ob ama/ [...]

[...] I hope this is just a rumor. Seriously. You want to tax renters (about 35% of us) to help pay for mortgages for people who entered knowingly into a business transaction that sadly did not end well? I truly feel sorry for them. I have several very good (and responsible) friends who are in trouble, and I understand the issues. They just bought at the wrong time. But what about my investment in a start-up that failed? People who are behind on credit cards? If you bought a new car, you are underwater the moment you drive the car off the lot. Help for those? Where does it end? Hundreds of billions of debt that our children will have to pay? Say it ain’t so, Joe. You can read the whole blog if you have adult beverages or blood-pressure medicine nearby. http://blogs.reuters.com/james-pethokouk is/2010/08/05/an-august-surprise-from-ob ama/ [...]

The purchase of a home has never been a promise of guaranteed returns. Buying a home (and subsequently sucking out the equity) has always been a game of “craps”. You roll the dice…you take your chances.

Most of the time, homebuying has proved to be a good investment. Sometimes…not such a good investment. But now, Obama wants to change the rules of this “craps” game.

It’s still “you roll the dice…”, but if you lose, the dealer doesn’t scoop YOUR chips off the table…he leans over and grabs the chips from the guy next to you. You get to keep playing…

Posted by ogottogo | Report as abusive

To “amboycharlie” at 6:59 AM:

“Reckless, careless and irresponsible bankers, brokers, and insurers…”

You left out the criminal Dem politicians & political cronies…Clinton/Clinton, Dodd, Franks, Waters, Raines, Gorelick, etc, that used the Carter-era Community Re-Investment Act to ramp up to steroidal-abuse levels, the sub-prime lending to folks that couldn’t even balance a checkbook…shoot, probably didn’t even HAVE a checkbook.

Yes, there were bankers, brokers, insurers, (and, appraisers, closing attornies), that cheated. And, they should be punished if they broke the rules. But, most of these folks were simply operating BY THE RULES put in place by the Dimwits above that simply let go of the reins.

Posted by ogottogo | Report as abusive

[...] million on signs promoting the utterly failed $797 billion “stimulus” boondoggle. – And now they are poised to steal billions more to reward reckless borrowers in mortgages they can’t afford. You and your children and grandchildren will be paying the [...]

Ignoring the grotesque financial implications…

If only 1 out of 5 mortgage holders is underwater, how does giving a bailout to 20% of the people make political sense!?!?

If the administration even formally PROPOSES this- expect Democrat losses in the triple digits in the house and pretty much every Dem senator up for re-election losing as well.

And as an added bonus- legislation passed that bans something like this ever taking place once the new congress is installed.

Posted by skf727 | Report as abusive

Forgiving debt is a form of bankruptcy. This possible action is a form of forgoing foreclosure and allowing people to stay in their homes during this crisis.

A better way with less impact on the economy is to allow the Feds or Banks to own the “Excess Debt” in people’s homes and offer owners a way-out by charging affordable rent to continue to live there. People should be allowed to keep their market value interest in the home. Home values are going nowhere, at least in my lifetime. There is no longer an “American Dream” for the younger generation.

It is unconscionable to just kick people out on the streets, due to the bad timing and encouragement by the shyster banks or mortgage companies, who knowingly allowed people to take “the deal of a lifetime.”

The Real Estate “Bubble Burst” was inevitable, although I did not believe market values would fall this far. The Feds and the Financial Institutions, who caused the crisis, should assist the public in retaining their home, or find them a more affordable place to live in a similar place that they had prior to the Great Re-Pression of 2008/2009.

There are enough “abandoned” homes now to allow people to “downgrade” to more affordable living quarters prior to the “forced upgrade” to higher living. This plan would require major coordination by Fannie and Freddie. It won’t happen, but it is a better plan than forgiving debt.

Jewel Health: http://www.jewelhealth.com

Posted by Kouel | Report as abusive

If he thinks the 90% of Americans who are honest, buy what they can afford and pay their bills will put up with this, it will be an August surprise FOR Obama.

Posted by fedscrewsfrugal | Report as abusive

America, wake up! Nothing Obama and his gang of Proggy thugs & thieves do is intended for the betterment of the USA.

Borrowing (stealing) to solve debt problems, is like creating cosmetics from one’s excrement. Maybe it could be made to ‘look good’, but the reality stinks!

Posted by jsbrodhead | Report as abusive

[...] There is speculation that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth, according to Reuters columnist James Pethokoukis. An estimated 15 million U.S. mortgages — one in five — are underwater with negative equity of some $800 billion. The vehicle for the bailout could be the Bush administration’s Home Affordable Refinance Program — or HARP, a sister program to Obama’s loan modification effort — which was just extended through June 30, 2011. The bailout, according to Reuter’s, “would be a stunning political and economic bombshell” before a midterm election in which Democrats are expected to suffer losses. The Treasury Department is scheduled to hold a meeting on the future of Fannie and Freddie on Aug. 17. [Reuters] [...]

This would be Obama’s final nail in the coffin of the USA..

Posted by jw5745 | Report as abusive

[...] ) Big news this week as rumors spread like wild fire about an An August Surprise from Obama? Would Fannie and Freddie really be willing to give principle reductions to all underwater home [...]

[...] ) Big news this week as rumors spread like wild fire about an An August Surprise from Obama? Would Fannie and Freddie really be willing to give principle reductions to all underwater home [...]

[...] James Pethokoukis of Reuters reports that we might see the current administration use the Bush-era HARP program to forgive hundreds of billions in bad mortgages. The bailout would not require congressional approval, since the money would go to Freddie and Fannie. Both of those entities have no ceiling on their bailout amounts. Unemployment is heading back up, GDP growth is sluggish, and Obama’s numbers are low. Three reasons why we might see an August Surprise. Share and Enjoy: [...]

Forgiveness of debt under current Internal Revenue Code would be considered a taxable event. . . adding the debt forgiven to an individual’s income for federal tax considerations. . . Now, if only the federal government would assure that its employees, 3rd party contractors and political representatives were current in paying their federal tax liabilities.

Posted by rbblum | Report as abusive

[OKAD-329]From Miyazaki, the daughter volunteered AV accent….

I found your entry interesting thus I’ve added a Trackback to it on my weblog :)…

Does no one here see what’s going on?

It would be worse than you could possible imagine. This is how it would work in practice. If this doesn’t make you mad, nothing will.

Suppose someone owes $500K mortgage on a house now worth $300K. In a refinance, the original mortgage is paid in full and a new one issued. Fannie would forgive $200K and issue a new $300K mortgage.

Let’s follow the money. Where would the $500K that Fannie (we the taxpayers) pays to terminate the original mortgage end up? Who owns the original mortgage(s)? They were most likely sliced and diced into tranches, aka toxic mortgage debt. And who owns that debt? It’s the buyers of the CDO’s, villain #1 on the list of enablers who caused the financial meltdown.

Our tax money would bail out the fat cats, pay them in full. A lot of the money would bail out European banks, who own large amounts of mortgage debt. Morgan Stanley owns a ton, guess why they are lobbying Congress.

Obama would frame it as a helping hand to Main Street America, but in reality it would be $100B’s or more direct taxpayer money to the pigs who caused this mess. Why do you think Congress removed the limit on subsidies for Fannie and Freddie. In return, we the taxpayers would own the newly issued mortgages.

All you Lefties who think this is “for the people”. Hell no, it’s for all the big thieves who got us into the mess to begin with.

Posted by dcx | Report as abusive

who is john galt?

Posted by trader3355 | Report as abusive

[...] via An August Surprise from Obama? | Analysis & Opinion |. [...]

“Atlas Shrugged” – Ayn Rand

Who is John Galt?

Posted by bogie7129 | Report as abusive

[...] I hope this is just a rumor. Seriously. You want to tax renters (about 35% of us) to help pay for mortgages for people who entered knowingly into a business transaction that sadly did not end well? I truly feel sorry for them. I have several very good (and responsible) friends who are in trouble, and I understand the issues. They just bought at the wrong time. But what about my investment in a start-up that failed? People who are behind on credit cards? If you bought a new car, you are underwater the moment you drive the car off the lot. Help for those? Where does it end? Hundreds of billions of debt that our children will have to pay? Say it ain’t so, Joe. You can read the whole blog if you have adult beverages or blood-pressure medicine nearby. http://blogs.reuters.com/james-pethokouk is/2010/08/05/an-august-surprise-from-ob ama/ [...]

[...] and became the talk of the street. Zero Hedge, Denniger and I wrote about them. Even big shots like Pethokoukis at Reuters added gas to the fire with his piece, An August Surprise from Obama. Morgan Stanley actually came [...]

[...] @ 3:23 am   With the HAMP scam reaching the most becalmed horse latitudes of incredibility, dubious rumors have it that Obama’s ready to try again with a new mortgage mod scam, this one centering on [...]

Debt forgiveness for mortgages is the wrong approach. Instead the federal government through Freddie and Fannie should guarantee the price of every home in the US at the price the current owner paid for it if it was purchased in the last 5 years. for home purchased more than 5 years ago, the guaranteed price would be an average similar home in the community. this would immediately stabilize the housing market , end foreclosures and stop the erosion of most people’s most valuable asset. The federal government already guarantees bank deposits and the prices of some agricultural commodities. why not home values? Also for years , the federal government pushed home ownership as a way to build equity. the Federal government has an obligation to back up this policy by guaranteeing the value of this investment. Otherwise , the government is saying to the american people ” You screwed up. You trusted us.” Yes it might cost a lot of money but this is the kind of spending that economists like Krugman are advocating. It is certainly better than wiping out debt obligations and forcing more banks into failure.

Posted by ejhickey | Report as abusive

[...] Rumours of huge Main Street mortgage bailout - FULL STORY [...]

[...] An August Surprise from Obama? Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011. [...]

[...] explains James Pethokoukis’ warning about the rumored write-off at Fannie for underwater mortgages.  That will either drop a bomb on [...]

[...] columnist James Pethokoukis tells us the markets are preparing for a fantastically expensive “August Surprise” from President Obama: [...]

[...] columnist James Pethokoukis tells us the markets are preparing for a fantastically expensive “August Surprise” from President Obama: [...]

[...] this rundown on what is now commonly known as The August Surprise based on this James Pethokoukis story at Reuters the other day in which wards of the state Fannie Mae and Freddie Mac purportedly plan to [...]

What is wrong with these people? Are they serious? We are going to mortgage our kids futures to help save people who are underwater. I have a failing business right now – not worth anything near what it was when I bought it. Will Obama give me the difference there? The insane asylum has truly been emptied.

Posted by hostdude99 | Report as abusive

SURELY THEY ARE TALKING ABOUT LOWERING THE INTEREST RATE AND NOT FORGIVING THESE LOANS. IF THEY FORGIVE THE LOANS AND CREATE EQUITY, THESE BORROWERS WILL JUST SELL THEIR PROPERTY AND MAKE A PROFIT. IF THEY LOWER THE INTEREST RATE THE LOAN BECOMES AFFORDABLE BUT THERE IS NO WINDFALL CREATED. THE NEW NOTE SHOULD BE DUE ON SALE…

Posted by KERRVILLETEXAS | Report as abusive

Snooki to President Obama: Stop Lying About Me!…

Very interesting post – I’ve added a trackback on my site, hope you don’t mind ;)…

[...] to a an article at the Drudge Report the Obama administration is about to make an executive order, that will direct [...]

[...] An August Surprise from Obama? | Analysis & Opinion |. No Comment Ping [...]

[...] “An August Surprise from Obama?“, James Pethokoukis, blog of Reuters, 5 August 2010 [...]

[...] have been rumors for the past week that the Obama administration plans an “August surprise” by ordering [...]

We purchased a home in 1988 and we put down 25% (to qualify) which was a $100,000 with a 40 year arm. Less than two years later our home dropped to half of what we paid.Talking about a bad loan!! No one bailed us out. We hung in there for 15 years and the price of our home went up and then we were able to refinance. Then we refinanced again and we still have only paid off $60,000 of the loan.
My neighbors bought the same place as ours but they got interest only for 5 years. They have 15 to 20 people who live there. It has now been 5 years and they are still here. They have paid nothing off their mortgage. Now if they are forgiven thousands off their mortgage it would be a sweet deal for them. It would be outrageous and unfair for all of the us who have hung in there for the American Dream!!!!!!

Posted by xnelle | Report as abusive

[...] Originally Posted by notyourname Bail out Wall Street? No problem, capitalism is all about bailouts. Help out Main Street? No way in hell that is socialism. This is interesting, the Fed foreclosing on homeowners. Now here is an article on how mainstreet will be bailed oot because the devaluation will be forgivien by the bank (paid for by renters). This is called the August surprise. An August Surprise from Obama? | Analysis & Opinion | [...]

[...] explains James Pethokoukis’ warning about the rumored write-off at Fannie for underwater mortgages.  That will either drop a bomb on [...]

No government is more powerful than the population of it’s people when they are awake and mad. The middle class is a very small size group compared to the the rest of us. And of the great mass, people are already on edge with the continued nonsense. Before, the rich knew this and only pushed so far as to not rile up the population. I read an article when bush was first elected that quite a few big guys in business were very very concerned of the fact that things would be pushed too far and cause alarm, thus wake up the sleeping average man in this country.

What is about to happen is a full fledged class war in America, and we were warned of this in Berkley by a political activist giving a speech there and using China as an example of what they have gone through and about to go through again. A sleeping giant, is the jest of what I heard continued in his speech. These hard working people do reach a limit of what they can take.

Government is too stupid to notice this, or simply think that it will not happen no matter what they pull. But many examples show otherwise. It will be on a scale that is unimaginable, America bought more guns recently than all the guns found in Russia. Ammunition factories have for some time gone to working around the clock to keep us with demand. Gangs found in the streets have sky rocketed to the point that police are talking about it on blogs that are often dedicated to the personel of police forces. And we can go on if you wish in pointing this out, that the tention is about to bust. It is like the fall of Rome, and it is about to happen to us.

At the same time, Russia has been playing us. They are ready to step in and intervene. Look up what kind of missiles Russia has and how they have chosen a war man that does not mess around. Look at what happened in Ossetia and Georgia. We have pushed them to the point that “they have to respond”. This is what we get for all us citizens day dreaming and acting like irresponsible idiots. China is also playing us, an a pack has been formed to counter the american threat that just wont go away. We are really really a bunch of idiots.

North Korea is also about to shoot missiles at us from afar. With all the military exercises going on their cost. The add the sales of massive lots of weapons to Taiwan, China is about to jump out of their seat. In fact, their missile building has increased during the Bush / Obama years to increase over 300 percent. And the quality of gear they are building is so good that America’s battle ships were warned to stay away or they would be sunk with a single missile. It is common knowledge that they all stay the distance which is quite far. In fact these weapons are so good that America has no other response but nuclear if fired upon.

The missile shield is crap, and the Russians are painting their missiles white to avoid the whole system. America really is putting out that kind of crap for gear. Yes, we may have more stuff, but look at the idiots who us it. Russia on the other hand builds stuff not for a profit, but to actually protect their county and people there will work for the military for free. America does not think this, it is always about profit. They also said if the shield goes up next month, that they will respond not with missiles, but drive a military force in to tear it out. And they will do it, and it will be under the eyes of the media so the bull we say on our media will be looked upon as not facts but propaganda as they did with the force sent to Ossetia.

America, if the oil spill did not wake you up, this better. You are about to get hit by Russia. I mean, what would you do if your country had ships parked within sight of your beaches, and missile batteries around all sides of your borders, and idiots for presidents and generals. Oh my god, we are about to see the consequences for our very very irresponsible behavior that seems to have no end. Look it up, Russia needs only a minute to reprogram their missiles to hit any target they want. Right now, they are pulling their nuclear fleet to the arctic where they will sit and punch the buttons. They have very sophisticated weapons, and Russia thinks like this. They build Bio weapons, and Nuclear weapons to the sum amount that will kill the entire world over ten times, ten times.

Want to play a game?

Posted by skateboardkid | Report as abusive

[...] explains James Pethokoukis’ warning about the rumored write-off at Fannie for underwater mortgages.  That will either drop a bomb on [...]

Did you get equally upset when you handed those vast funds to the unproductive ivy league welfare recipients as well?.

As I see it- this is more stimulus of bad stock- just like the first stimulus welfarising the rich. Didn’t work then, won’t work now.

Time to produce the goods you consume!

Posted by wokkathon | Report as abusive

[...] An August surprise? Given this development, it has already occurred in Ohio (HT RightOhio): Ohio will get the largest chunk among five states splitting $600 million in foreclosure prevention money, the Obama administration announced Wednesday, Aug. 4. [...]

[...] Mac would be told to forgive a portion of the mortgage debt of millions of underwater homeowners.  From Reuters: Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington [...]

[...] figured out a way to fund ACORN and ACORN like groups without the consent of Congress, Obama may spend another $100 billion to “forgive” underwater mortgages, Iran continues to pursue the development of nuclear [...]

[...] one side of the scale, some are speculating that Obama could announce a gigantic bailout of Main Street in the form of debt relief for millions of Americans whose homes are now worth more than their [...]

[...] rumors arose last week of a plan by the Obama administration to forgive portions of the principal in underwater mortgages at Fannie Mae and Freddie Mac, Rasmussen decided to poll on the supposed “August [...]

[...] one side of the scale, some are speculating that Obama could announce a gigantic bailout of Main Street in the form of debt relief for millions of Americans whose homes are now worth less than their [...]

[...] one side of the scale, some are speculating that Obama could announce a gigantic bailout of Main Street in the form of debt relief for millions of Americans whose homes are now worth less than their [...]

What about all those poor responsible folks who bought a house during the housing bubble and through hard work have already paid off the mortgage???? Does a hardworking stiff ever get something for nothing? There are 820 days until the next presidential election and we need to bounce this fool out.

Posted by auto.pilot | Report as abusive

Here this, government idiots: Let’s say two neighbors both got the same mortgage at the same time on similar houses, but from two different lenders (Big Bank and Small Bank). One loan was sold to Fannie Mae by Big Bank and the other was not sold to Fannie, but remains on the books of Small Bank. Are you telling me that the borrower who got his loan from Big Bank gets part of his loan forgiven, simply because his loan was sold????, but the borrower who got his loan from Small Bank still owes the whole amount???? Does ANYONE in our government understand supply side economics?

Posted by auto.pilot | Report as abusive

[...] the percentage of people underwater in the Valley, this could be big if it has any legs… An August Surprise from Obama? | Analysis & Opinion | "Main Street may be about to get its own gigantic bailout. Rumors are running wild from [...]

[...] all started with a Reuters article titled, “An August Surprise from Obama?” It suggests that a forced principal writedown program would be funneled either through the existing [...]

Escaped tiger found after massive South Africa search…

Interesting post. I’ve added a Trackback to it :)…

[...] rumors arose last week of a plan by the Obama administration to forgive portions of the principal in underwater mortgages at Fannie Mae and Freddie Mac, Rasmussen decided to poll on the supposed “August Surprise” to [...]

people, the wheels are coming off this bus. if you can’t see this, you need to wake up. soon, lines will be drawn. the illusion is fading, and the reality is beginning to appear. you will not make it out alive. prepare yourself for the time beyond time.

Posted by 187USA | Report as abusive

[...] August Surprise from Obama? Posted: August 9, 2010 by Rob in US News 0 James Pethokoukis Reuters August 9, [...]

[...] Doctor Zero puts this monstrosity into proper perspective: Reuters columnist James Pethokoukis tells us the markets are preparing for a fantastically expensive “August Surprise” from President Obama: [...]

[...] one side of the scale, some are speculating that Obama could announce a gigantic bailout of Main Street in the form of debt relief for millions of Americans whose homes are now worth less than their [...]

[...] one side of the scale, some are speculating that Obama could announce a gigantic bailout of Main Street in the form of debt relief for millions of Americans whose homes are now worth less than their [...]

[...] bailouts, etc.) would therefore depress the Economy even further! And especially not right now. The word about the street is that the QE2 is about to sail. Main Street may be about to get its own gigantic bailout. Rumors [...]

[...] An August Surprise from Obama? (Hat Tip: Brian B.) [...]

Just another progressive slush fund…follow the money.

Posted by squirrel533 | Report as abusive

[...] Pethokoukis, who posts under the heading "Political Risk" at Reuters.com, squawked "An August Surprise from Obama?". According to Pethokoukis, "Rumors are running wild from Washington to Wall Street" [...]

[...] though this story was making the rounds five days ago, it’s somewhat new to me. It seems rumors are flying that Barack Obama is preparing an August [...]

Wouldn’t it be great if the gov’t would pay all the homeowners mortgages off which would allow for more homeowner spending. I believe that instead of giving to main street the gov’t should help the homeowner. 15 million homes could produce buying if there was more money in their bank instead of the mortgage companies.

Posted by dannyboy9959 | Report as abusive

HUD recently sent a letter to mortgagees/lenders basically encouraging them to reduce principal on mortgages where the principal amount exceeds the home value. The Treasury provides the lenders and 2nd lein holders monetary incentive paid for by the U.S. Taxpayer.
(the formula for determining their incentive payment can be found here: https://www.hmpadmin.com/portal/docs/ham p_servicer/sd1005.pdf

I don’t know about you, but I have paid my mortgage payments during the past 20 years even when my principal owed was more then the value of my home in the 1980′s. Purchasing a home is a long term investment. The value changes with demand for homes.

As long as the borrower has the means to pay their mortgage they should not have their loan modified and principal forgiven at the expense of taxpayers.

Even those that are behind on the mortgages should only be provided the opportunity to refinance at the current historically low interest rates; and only if they qualify. Too many of these rewritten loans have defaulted a second time at the expense of taxpayers.

If a lender wants to avoid a foreclosure by reducing the principal and rewriting the loan at current interest rates it should not be done at the taxpayers expense. It is to their own advantage to do so as if they foreclose the house will likely sit there and the cost of maintaining it and advertising it will far outweight reworking the loan with the borrower.

Fannie and Freddie are still making loans that do not require even 10% down. They continue to buy bad mortgages and now the Treasury is going to give them Billions more and are authorized to continue to do so.

Enough already. No more Federal Money to bail out Fannie and Freddie which are now basically owned by the Federal Government. It has to stop.

This is why they didn’t include them in the new Financial Regulations Bill which the Dems said did not promote bailout financial institutions because they were too big to fail. They knew they would be bailing out Fannie and Freddie for years.

Posted by fedupwithfedgov | Report as abusive

[...] here comes the Apocalypse: Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington [...]

[...] This maybe old news to some and I’m not sure how I missed this article, but it’s well worth reading. http://blogs.reuters.com/james-pethokouk is/2010/08/05/an-august-surprise-from-ob ama/ [...]

[...] expensive: the additional trillions of dollars it will take to reinflate the housing bubble, or the estimated $800 billion of negative equity that is out there? There’s no [...]

[...] expensive: the additional trillions of dollars it will take to reinflate the housing bubble, or the estimated $800 billion of negative equity that is out there? There’s no [...]

[...] than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater homeowners with negative equity of some $800 [...]

[...] found out that yahoo mail has a twisted sense of humor, there’s a small chance that we might all get our mortgage debt reduced, the economy still sucks, snopes.com is a big sham, [...]

[...] finishes with his take on the speculation that Obama will be ordering Fannie Mae and Freddie Mac to ‘forgive’ the debts of various groups of irresponsible [...]

[...] James Pethokoukis said he heard tale of a Fannie / Freddie I assumed it would be something along the lines of this [...]

[...] housing prices have declined anyway by about one-third from their 2006 peaks, resulting in some $800 billion of negative equity for homeowners. Making matters worse, they may fall another 20 percent should the economy remain [...]

[...] housing prices have declined anyway by about one-third from their 2006 peaks, resulting in some $800 billion of negative equity for homeowners. Making matters worse, they may fall another 20 percent should the economy remain [...]

[...] following article is from [...]

[...] following article is from [...]

[...] Rumours of huge Main Street mortgage bailout - FULL STORY [...]

[...] two days after I posted “My Solution to the Foreclosure Crisis,” below, I read this report that Obama is considering a significant proposal along the lines I discussed.  We’ll have [...]

[...] This is obviously why the administration quickly shot down rumors of a homeowner bailout when they cropped up this summer. And it’s probably why it will never happen. But before you sneer, ask yourself the [...]

[...] If this is true, then the federal government is about to send a huge jolt of adrenalin into the economy. Too bad it would also result in you having to pay (a lot) for someone else’s mortgage: Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011. [...]

[...] Reuters – Obama August Surprise? [...]

[...] 2) I’ve been saying from the beginning of this crisis that it will take bold and dramatic federal intervention to make a dent in this crisis.  Reliable reports from a variety of sources report that a dramatic federal bailout of mortgages may be coming.  Click here for that report. [...]

[...] If you can’t afford a home, you are DEPENDENT upon them for a no documentation mortgage, and loan forgiveness. Are you getting [...]

[...] James Pethokoukis hears rumors of an August surprise coming from the White House, one that will attempt to win backs the hearts and minds of voters dismayed at the failing economic policies of the Obama administration. With the government fully in control of Fannie Mae and Freddie Mac, Barack Obama may issue an order to forgive portions of underwater mortgages processed through the GSEs, where negative equity approaches $800 billion overall. Some financial houses have begun quietly preparing for the possibility: From Hot Air Image via Wikipedia [...]

[...] refinancing but didn’t offer clear evidence of such a plan. In August 2010, Mr. Pethokoukis made similar speculation that the administration would lower homeowners’ mortgage rates en masse as a prelude to the [...]

[...] and became the talk of the street. Zero Hedge, Denniger and I wrote about them. Even big shots like Pethokoukis at Reuters added gas to the fire with his piece, An August Surprise from Obama. Morgan Stanley actually came [...]

[...] Reductions: James Pethokoukis, writing for Reuters, reported that on August 17, 2010, the Obama administration m… (An underwater mortgage is a loan with a principal balance of more than the value of the [...]